Canadian Power Pac is one of Alberta’s largest unionized electrical firms. Run by the Kinsey family since 1977, the company has grown from a small operation housed in an Edmonton industrial park to a thriving business with 140 employees, and contracts with big retail stores and schools.

The firm pays more in pension and health-care benefits than most of its non-union counterparts — roughly $6 to 8 per worker per hour, says Rob Kinsey, the company’s general manager. To help offset the extra costs, Canadian Power Pac has relied on payments from a Market Enhancement Recovery Fund (MERF), money offered by the unions to unionized construction companies to help them compete for contracts against non-unionized firms whose lower spending on benefits allows them to offer cheaper rates.

However, Kinsey is afraid for the future of his company. A new provincial law will ban unions from paying MERF money to unionized contractors. “This is a strike against businesses,” says Kinsey, who estimates his company might have to lay off 100 employees — he doesn’t want to spurn the unions or cut the company’s benefits. “(The government) is forcing you to either go under or find a way around it. This is bad, bad legislation.”

Bill 26, passed last week by the Alberta legislature, is designed to tighten the province’s labour legislation. In addition to restricting MERFs, it bans paramedics from going on strike, makes it harder for unions to send organizers into non-union shops by requiring that workers be employed for 30 days before they can vote on union certification, and gives newly unionized workers a 90-day window to pull out of their union.

Under the new law, unions will still be allowed to collect money for MERFs to top up members’ benefits, but they won’t be allowed to transfer the money to unionized firms to help them bid on contracts. “We just don’t think it should be part of the bidding process,” says Janice Shroeder, spokesperson for the government’s department of Employment and Immigration. “The concern there was from a business fairness sense.”

Non-unionized construction companies are happy about Bill 26, having long argued that MERFs allow unionized shops to unfairly compete. “The union would essentially buy jobs for unionized contractors,” says Joel Thompson, vice-president of the Merit Contractors Association, an industry group that represents non-unionized construction companies. “A contractor who is competitive is shut out.”

Unions that use MERFs, however, argue that the funds are necessary for higher-paying unionized businesses to effectively compete for jobs. “(MERFs) are not predatory, they’re not used to undercut a non-union contractor,” says Tim Brower, Alberta business manager with the International Brotherhood of Electrical Workers. “If it was predatory, (unionized companies) would get every contract in the province.”

As it is, he estimates that only 15 per cent of contracts generally go to unionized shops. In Calgary, the number is roughly two per cent. The union is planning to challenge the legislation in the courts.

The provincial opposition tried unsuccessfully to block the bill, which was introduced on Monday, June 2 and sped through the legislature in just four days. Hugh MacDonald, Liberal Labour critic, says the government behaved undemocratically by using closure to cut short legislative debate on the law. “They never consulted the unionized contractors,” he says. “Construction workers can no longer trust the Conservative government.”

MacDonald further argues that, without access to the MERFs, the government will have to pay health and pension benefits itself, which will raise the cost of construction.

The province’s paramedics are also apprehensive about Bill 26, but Rick Fraser, president of CUPE local 3421, their union, hopes to sit down with the province in the next few weeks and hammer out details. In particular, he wants the union to be able to pick the bargaining agent who will negotiate future contracts. He’s encouraged that the government is putting money into emergency services, but concerned that he hasn’t seen anything that says how the province will treat EMS workers. “I can’t re-iterate enough that it’s the workers who provide the service. They need to be taken care of,” he says. “There’s a lot of questions left to be answered.”

As for Kinsey, he’s waiting to see what his company will have to do when it loses its MERF funding. Several of his current projects are drawing money from the fund, and under the new law will lose it all right away.

His family has supported the provincial Progressive Conservatives for 30 years, and Kinsey is himself a card-carrying party member. He can’t see a reason to restrict MERFs and says Tory MLAs he’s spoken to don’t see a reason for the law. “They could be putting a lot of business in jeopardy in this province,” he says.