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June 29, 2009

Toronto CUPE strike’s impact could grow with time

The impact of Toronto’s city worker strike on local construction will only become truly evident if it stretches out into the deep summer, says the Toronto Construction Association.

“The incremental cost of losing a few days is relatively insignificant but if it grows into a few weeks it begins to do some real damage,” says John Mollenhauer, TCA president.

“It is still early and the impact of a strike like this grows exponentially with time.”

Twenty-four thousand Toronto municipal workers in Canadian Union of Public Employees (CUPE) Locals 79 and 416 went on strike last week. Among the striking city workers are permit staff and inspectors.

Mollenhauer says he has been asked to put a price tag or project a possible cost for construction that could result from the city worker strike.

He says that is “almost impossible to forecast.”

“There is no way not to incur costs,” says Mollenhauer. “There are contracts structured around specific delivery dates and they can hinge on specific occupancy dates for tenants or leasehold space for tenants. But if you cannot get permits, you cannot get started.”

The ripple effects from this delay can then leave a company with funds earmarked for a project that cannot be started. This then leaves a project having to make up for lost time which typically involves a premium on labour and supervision costs.

“It always has an impact, no question. You can survive a few days comfortably but when it starts to become disruptive the impact of that disruption can become huge,” says Mollenhauer.

Windsor is currently enduring through the 12th week of its city workers strike. Construction companies in that city have had to deal with picket lines at municipal construction sites and attempts, during the early days of the strike, of site shutdowns by striking workers. Now projects are dealing with challenges on the city’s contract management end despite the best efforts of city managers to process the contract work.

TCA is prepared to start providing support to its members such as best practice guidelines during a prolonged strike situation to help mitigate their costs through a little better planning. The possible delays on projects do not just create a need for eventual premium costs to make up for lost time, adds Mollenhauer.

“It can also give rise to disputes because delays have a cost that affects the contractors and trade contractors,” he says. “Owners have commitments and expectations on delivery dates and sometimes that gives rise to delay claims. Ultimately we all pay.”

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