Construction industry groups in Manitoba are raising concerns over a contractor surcharge tied to public infrastructure projects, arguing the fee lacks transparency and could significantly impact project costs.
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The issue centers on the Manitoba Jobs Agreement (MJA), a provincial framework designed to prioritize local hiring, apprenticeships and workforce diversity on major publicly funded construction projects.
Three key industry bodies—the Winnipeg Construction Association, Manitoba Heavy Construction Association and Construction Association of Rural Manitoba—have jointly voiced concerns about what they describe as a “hidden fee” embedded in the agreement.
According to the groups, contractors working on government-funded projects are required to pay a surcharge of $0.85 per hour for each worker. The collected funds are directed to Manitoba Building Trades, a coalition representing unionized construction trades.
"On a major MJA-covered infrastructure project, that’s not pocket change. That’s potentially millions of dollars diverted from public investment, with zero transparency," a portion of the statement reads.
Industry leaders argue that the fee structure lacks clarity and could discourage participation, particularly among non-union contractors, who make up a large share of the province’s construction sector.
"A lot of them will be suspicious and have a lack of understanding of what the agreement requires them to do and will simply stay away," said Ron Hambley.
The associations are now calling for Manitoba’s auditor general to investigate how the funds are collected, managed and allocated.
Provincial officials, however, maintain that the fee supports long-term workforce development goals.
Public Service Delivery Minister Mintu Sandhu emphasized that the funding is tied to training initiatives aimed at strengthening the construction labor pipeline.
"We are training the workforce for the future," he said. "It's about training."
Supporters of the agreement, including Manitoba Building Trades, say such fees are standard practice on large-scale infrastructure projects across Canada.
"These are common practices across the country on major projects, whether that's the ... government of Ontario doing it, private contractors across the country on major hospital and infrastructure builds," said Tanya Paulson.
"We are bringing worker perspective and worker prioritization and worker planning to the forefront of capital projects."
Still, critics—including Progressive Conservative MLAs Josh Guenter and Konrad Narth—say the government has not provided sufficient detail about how the funds are used.
"There's no ability for Manitobans to look into where is this money going, and that's a huge concern," Guenter said.
The Manitoba Jobs Agreement applies to projects valued at $50 million or more and includes targets for local hiring, apprenticeships and workforce inclusion. The province has already announced that several school construction projects will be delivered under this framework.
However, industry stakeholders warn that additional costs—especially when applied across large labor forces—can quickly escalate into millions of dollars, potentially affecting project budgets and bidding behavior.
"If the wage surcharge is "$0.85 on every hour worked, these are very significant cost implications for some of these large projects," Hambley said. "We want to know if ... there's a plan to use the money, what it's for, how it'll be tracked."
Concerns are also emerging that the policy could create a “chilling effect” on bidding, with some contractors hesitant to pursue public projects due to uncertainty around requirements and costs.
Progressive Conservative Leader Obby Khan echoed these concerns, suggesting that some firms may avoid MJA projects altogether.
"That's Manitoba taxpayer dollars being siphoned off in this job agreement to go to an organization that is supporting this NDP government, and that is wrong," Khan said.
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The debate highlights a broader tension within the construction sector: balancing workforce development and policy goals with cost efficiency and transparency.
While governments across Canada are increasingly adopting project labor agreements and workforce mandates to address labor shortages and promote equity, contractors often push back when implementation details are unclear or financially burdensome.
In Manitoba, the outcome of this debate could influence not only future infrastructure delivery but also contractor participation, competition levels and overall project costs.
Manitoba’s contractor surcharge under the Manitoba Jobs Agreement is drawing scrutiny from industry groups demanding greater transparency. While the province frames the fee as an investment in workforce training, critics argue it could raise costs and discourage participation—setting the stage for a broader debate over how public construction projects are funded and managed.
Originally reported by Bryce Hoye in CBC.
