News & Events
December 2, 2013
CDAO Chair, Clive Thurston recently took the time to pen a column for Daily Commercial News. The following is what appeared in the Dec. 11, 2013 editon of the paper and online. Local Knowledge: what does it really mean and how is it meant to work in Ontario’s AFP (alternative financing and procurement) programs? Is it a method to make it difficult or even to exclude foreign competition or really about creating a level playing field for all? Recently, there have been stories in some major papers alleging it is to exclude or create barriers to foreign firms and might be in contravention of free trade acts. Interestingly, to my knowledge, none of us who were involved in helping to establish this program were asked for an opinion. So allow me to provide some background and some clarity to the program known as “Local Knowledge.” [caption id="attachment_300" align="alignright" width="199"]
Clive Thurston, CDAO Chair[/caption] Ontario’s successful AFP program began with industry input and consultation. OGCA (Ontario General Contractors Association), Ontario Association of Architects and Consulting Engineers of Ontario were invited at the very start by then Minister David Caplan to provide input on creating the system. One key area that came up after the first year was the government’s decision to promote Ontario’s program to the world and encourage investment by foreign consortiums. There was concern expressed at that time as to how this would work and would Canadian companies be put at a disadvantage. In the first years of the Ontario “open for business” program or promotion, this turned out to not be a problem as the world was busy elsewhere. However, with the economic meltdown in the U.S., the European debt crisis, etc., Canada became a very desirable location to come and look for opportunities. It was then that the largest number of foreign firms began to appear in Ontario, looking to buy Ontario companies, set up their own shop or partner with firms to participate in the AFP process. The problems only then began to surface, clearly indicating that despite the fact our companies can match any of these foreign firms in quality, design, engineering and ability, the playing field was altered drastically. Problems were identified, like awarding the same point value for a hospital in Spain as one built in Thunder Bay, Ont. Financing was challenged as several foreign groups had government backing which would be like the Ontario government financing PCL or EllisDon. Issues arose regarding how subcontracts were being awarded. Some even felt that aspects of Canadian contract law and the laws governing bidding and tendering were not being equally enforced. In particular, the issue of safety for workers was raised by trades and companies. Ontario’s advanced system of regulatory practices and safety culture were new to many of the firms coming here. Something needed to be done to ensure that all bidders were providing the same service and bidding on an equal basis. Then Minister Bob Chiarelli met with industry leaders and listened to these concerns. The minister, his staff and Infrastructure Ontario staff worked with the Construction and Design Alliance of Ontario partners to find answers. Months of work went into this process and at the end a “Local Knowledge” scoring framework was agreed to and implemented by the government which was a bold and visionary move and one supported by the industry. While broad in its terms, it set a standard of “competency” for any consortiums or firms doing business in Ontario on AFP projects. It was and is a positive start to leveling the playing field and ensuring not just fairness in the bidding processes but the safety of Ontario workers. The alliance is working with the ministry to further define the rules and definitions. None of the requirements is a barrier to any firm wishing to work in Ontario. Rather, it ensures that when working in Ontario you have the required knowledge of our codes, polices, laws and tendering procedures. In short, it requires “competency.” That, in our opinion, is not contrary to the intention of free trade.