Open tendering would help Toronto build a better city

During a recent mayoral debate, candidates were asked if they support open tendering. Their responses were remarkably different. While many Toronto voters may not be familiar with the term, what they should know is that Toronto has a lot to gain by following the lead of every other Ontario city, and supporting a competitive bidding process on taxpayer-funded projects.

So, what is ‘open tendering’? When municipalities want to build infrastructure projects, from police stations to community centres and libraries, they issue tenders and invite all interested and qualified contractors to bid. That’s what happens in every single Ontario municipality, except Toronto. 

This city does not invite bids from all contractors with the background and expertise to build. Toronto only considers bids from contractors whose workers belong to a select group of construction unions. This dated and restrictive process means that billions of dollars in construction work is awarded to the same group of companies, year after year. It’s the reason you see the same construction company signage at many city-run construction sites.

It’s clear that the more bids there are, the greater the competition. This is open tendering, and it has proven benefits. More competition has resulted in major savings in other municipalities where bidding used to be restricted and is now open. For example, research shows the Region of Waterloo is saving approximately $24 million annually on the cost of building public projects. Similar results have been reported in Hamilton and Sault Ste. Marie.

Toronto could benefit too. A recent report found that it could save $347 million each year. That’s funding that would help improve transit security, build more affordable housing or expand mental health supports, without raising property taxes or relying so much on other levels of government for funding.

Still, Toronto sticks with its old ways. It doesn’t promote a competitive bidding process and instead allows only contractors with ties to certain unions, to bid on projects. As a result, Toronto doesn’t benefit from the expertise of many top social housing contractors that build in Hamilton and Mississauga. They’re shut out of city projects, along with their workers.

Some try to argue that open tendering will compromise safety, or lead to lower wages for construction workers. That’s simply not true; not when the city’s requirement of a Certificate of Recognition (COR) ensures that only the safest contractors can bid and work on City of Toronto construction sites. Maintaining Toronto’s Fair Wage Office and Policy also ensures that workers are paid good wages. For instance, Toronto’s Fair Wage Policy states that electricians working on city projects must be paid over $50 an hour including vacation and holiday pay.

Back in 2019, the Ontario government passed legislation that made it possible for every municipality to open up their tendering process and accept bids from all qualified contractors. Although City of Toronto staff recommended that the city endorse this legislation, Toronto became the provincial exception, by not supporting open tendering.

Times have changed. Toronto can no longer afford to keep tendering projects the same way it has for decades. Paying far too much for construction work makes no sense, given today’s fiscal reality. The city’s capital budget has a shortfall of well over a billion dollars and growing, while the state of our infrastructure gets worse.  

Building a better city takes vision, funding and the collective will to make different choices. A practical starting point is requesting that the province make a legislative change so that Toronto has another opportunity to get with the times, and get behind open tendering,

This simple action would allow Toronto to join all other Ontario municipalities by openly tendering city projects, and putting those cost savings to good use.