How much will the Ontario College of Trades collect in membership fees?
Employers group, college registrar disagree on revenue expectations
Northern Ontario Construction News staff writer
Representatives of a coalition of construction industry employers and the leadership of the Ontario College of Trades (OCOT) disagree on how much money the college will raise through membership fees that will be collected from trades people beginning in January 2013.
The Ontario Construction Employers Council says in a news release that a proposal to “impose membership fees on the province’s skilled trades workers and employers (is) nothing short of an $84 million tax grab that should be scrapped.”
The employers’ group spoke out in late May as a brief OCOT consultation period for comments about the proposed fees neared its conclusion on Sunday, June 3.
Coalition members include the Heavy Construction Association of Toronto (HCAT), Merit Ontario, the Ontario Electrical League (OEL), the Ontario General Contractors Association (OGCA), the Ontario Road Builders Association (ORBA), the Ontario Sewer and Watermain Contractors Association (OSWCA), the Progressive Contractors Association of Canada (PCA) and the Residential Construction Council of Ontario (RESCON).
The OCOT has been designed to co-ordinate apprenticeship (including setting apprenticeship-employer ratios) and encourage participation in the skilled trades and has been a controversial idea since its conception. The Liberal government and organized labour support the OCOT; non-union employers and representatives of some associations such as the OGCA think the idea should be scrapped.
Bob Guthrie, the OCOT’s registrar and executive director, says he doesn’t expect the amount to be raised from membership dues at the outset to be anywhere near the figure proposed by the employers’ group, and if the college grows to the level that the overall revenue reaches the level indicated by the employers’ coalition, that actual members’ fees will decline.
“We know there’s 110,000 certificates of qualifications in the construction trades,” he said. “If we were to apply the fee to all these people, who are required to be members of the college, and each member pays $100 a year, that would be $22 million,” he said. “That’s the bulk of the fee-paying membership.”
He said apprentices and journeypeople in non-certified trades don’t need to be members of the college, and at the start, employers won’t be required to pay fees. The college has requested a $31 million budget from the provincial government in start-up funds.
Guthrie says all apprentices will be required to be members of the college, whether or not they are in the compulsory trades, but the proposed $50 to $100 annual fee should not be onerous.
In documentation outlining possible fee ranges, the college says the fee for journeypeople may be $100 to $200 a year. The cost for employers could be between $100 and $200 annually (for small employers with zero to five trade employees) to $400 to $600 annually (more than 50 trades employees.)
“What the fees will be, I can say we don’t know,” said Guthrie. “Our goal is to have the lowest regulatory fees of any (professional) college everywhere . . . that’s a realistic goals.”
Guthrie said that while “compulsory trades” will need to be members, participation from the majority of trades will remain voluntary – though “industry employers and representatives can bring forward applications to become a compulsory trade,” he said. “The OCOT has a balanced representation, including employees and employers, both from the union and non-union sectors.”
These perspectives are not shared by the employers’ group.
The OCOT is driven by “certain interests,” says David Frame, the OGCA’s director of government relations. “Many run their own training centres for the various trades,” he said. They have an interest in driving traffic to their centres. And the fact that a small number of them have a control of the board of directors means that there has become an extremely narrow focus in the college.”
“The coalition reviewed a number of data sources to determine the size of membership classes and project the funding they would generate, Frame said. “Some sources such as sector council trade data projected a sizeable membership that would raise $100 to $200 million in fees. In the end we went with a very conservative projection based on Ministry of Training Colleges and Universities data on existing registrants.”
“A scant list of five bullets of proposed ‘benefits’ doesn’t even come close to justifying an $84 million price tag for Ontario tradespeople and their employers,” coalition vice-chair Karen Renkerma said. “The Ontario College of Trades has yet to demonstrate any benefits to our industry that don’t already exist today without the college.”
The coalition in its news release says “the reality is $84 million is a conservative estimate based on Ministry of Training, Colleges and Universities figures, only counting registered apprentices, journeymen and employees today.”
“It does not include the hundreds of thousands of skilled Ontario tradespeople who are not currently registered, and whom the college aspires to tax as soon as possible. If this occurs, the $84 million tax will balloon exponentially.
“What makes the proposed tax all the more brazen is that it’s for benefits the government either can’t possibly deliver, or for services it is already charging tradespeople for today through the Ministry of Training, Colleges and Universities,” the news release says.
“This is a huge amount of money the McGuinty government wants to pick from the pockets of Ontarians who work hard to make their living in the skilled trades,” said employer coalition chair Sean Reid. “While the college’s benefits are highly questionable, the college’s future as a job killer is certain.”
In a formal submission to the OCOT, the coalition outlines several concerns, including a lack of transparency and information around the college’s budgetary requirements, future business plans and how the college will be financially accountable to Ontarians.
“Without transparency, accountability or explanation of any real benefits to the skilled trades sector, the college is in no position to impose a new $84 million tax on Ontario trades workers and employers, and we’re in no position to accept it, Reid said. “The entire process is flawed, and that’s why this membership fee proposal must be scrapped.”
Guthrie says the college has received a couple of formal letters from industry associations questioning the fee-setting process, and has received (at press time in late May) about 200 submissions online. However, he said more will likely arrive before the June 3 deadline.
He said the college board will meet in mid-June to discuss the fees, and he expects a decision will be reached by the end of the summer, with the new levies starting in January 2013.
Guthrie says he cannot imagine the fees ever reaching outrageous levels. The college is “responsible for the development and maintenance of standards for all of 150 plus skilled trades,” he said.
Non-compulsory trades, the bulk of the trades under the college’s jurisdiction, do not need to belong, he says. There are exemptions for some compulsory trades, such as industrial electricians. If the membership grows, Guthrie anticipates that members’ fees will decline.
“Employers at some point, will if they employ skilled tradespeople, will be required to be members of the college,” Guthrie said. “That won’t be the case in the very near future – in fact we don’t even know who these employers are.”
The 110,000 compulsory trades, “currently part of a three-year renewal cycle for their certificate of qualification, will, at some point be members of the college and subject to the membership fees if they want to maintain a valid certificate of qualification,” he said.
The college budget will be set to operate on a “break-even cost recovery basis,” he said. “It is not going to be a profit centre.”
If the OCOT reached the membership level where its budget approached $100 million, “we would be delighted – there is an obvious relationship between the number of members and the amount of fees. You can see it. It’s plain and obvious – we’ll have the largest membership and lowest fees of (of any self-regulating college.)”
Frame, meanwhile, says he believes the OCOT will, through compulsory certification, restrict access to the trades.
“We understand that the college will soon entertain proposals to increase the number of certified trades,” he said. “A limited number of training centres will be able to fulfill the requirements of certification. We are very concerned of availability and access to training and the potential to meet future needs for skilled tradespeople.”
“The more heat we can bring, the more reluctant the government will be to back this (the college,” Frame said. “We are providing awareness to our members and tradespersons about what they are up against.”
Guthrie says he expects most employees will pay their own fees. Some employers may cover the costs “as a loyalty incentive bonus or reward system.”
“In other jurisdictions employers don’t pay these fees, or if they do and a deal is made between employer and employee, and I find it hard to believe that employers by and large will pay these fees.”