Trades training - Building trades in Bird CEO's blood

Bird's cross-Canada building, renovation and restoration projects range from hotels to hockey arenas, including UBC's Thunderbird Winter Sports Centre, which is one of the Vancouver 2010 Winter Olympic venues, to jails to jumbo-truck maintenance facilities in the Alberta oilsands.

Now, in his new role as chairman of the Canadian Construction Association (CCA), which represents approximately 20,000 ICI firms across the country, Charette's top goal is to increase funding for college training programs.

Brennan O'Connor, Business Edge

As chairman of the Canadian Construction Association, Paul Charette keeps his eye on industry challenges.

Under his leadership, the CCA also wants to overcome a nationwide skilled-labour shortage, improve immigration policy and help small contractors share in billions of dollars worth of public-private partnerships.

1. What was it like growing up in Winnipeg?

"I grew up in West Kildonan. It's north of North Winnipeg, but it's all amalgamated now and considered part of Winnipeg. We were pretty poor. In parts of my youth, we were on welfare for a short period of time. I learned at an early age about a strong work ethic. I started off delivering papers and managed to increase my route from about 50 papers to more than 120. Then I kind of hired myself out doing chores, whether it was shovelling snow in the wintertime or cutting lawns. Just to give you an idea of how poor we were, we didn't even have sewer and water. We used to have to carry our water from a stand pump four or five blocks away."

2. What did your parents do?

"They both worked at the Canadian Wheat Board for many years."

3. What was your boyhood dream?

"I never really had any dreams.

Like I said, I grew up in a pretty poor environment. I didn't even know I had to have dreams."

4. How did you wind up getting the bursary that enabled you to enrol at Red River College?

"I'm not really sure, other than I probably would have to thank my teachers. I'm sure they knew my family situation, so the bursary came from the Women's Auxiliary of West Kildonan. It was purely that - a bursary that had no strings attached.

Paul Charette

Being rather young and not too thoughtful, I really didn't know what to do with it, so I phoned my older sister, who by now had moved out of the city. She was living in Lloydminster, Sask. I told her I'd won this bursary and I was either going to buy a car or go to college. She said, 'You're being rather stupid. You can always buy a car. Get an education.' So I followed her advice and that $200 bursary got me into Red River College."

5. Why did you choose to study civil technology?

"I really didn't have any dreams of working in construction at that time. I was really relying on the guidance counselors, who had indicated to me that I had a strong ability in math and the sciences. With that kind of guidance, I decided that civil technology seemed to be more suited to my strengths than anything else. In fact, I really wanted to be more on the engineering side than the construction side, but the program was well suited to do either. The irony of this is, when I graduated, I wanted to work for Bird. We had lots of job offers when I graduated in 1967. They ended up hiring somebody else in my class. I ended up taking my second choice ... and worked for an engineering company for nine years. But as an engineering technologist at an engineering company, you weren't given the same level of responsibility as engineers were, and I always felt somewhat frustrated that my career advancement was going to be limited without having an engineering degree. When I had the opportunity to move to Bird, it became pretty obvious to me that they were hiring on ability, as opposed to how many degrees you can hang on the wall. I started with Bird and moved to Regina in 1976. I went there as a junior project co-ordinator."

6. What did that entail?

"Basically, co-ordinating construction projects from the office. It's an administrative job, but you work in close conjunction with your superintendent in the field. You really get into a lot of the details of construction. The guy that hired me, Len Varey, was from Toronto and he was a great mentor. He was one of the project managers on CN Tower in Toronto. I considered him one of my best friends and I spent three great years in Regina under his mentorship. My first two or three jobs were building schools, and then I was a construction manager on the expansion of Taylor Field, which was really very exciting. I worked with the Saskatchewan Roughriders, got to know the team a little bit and their coach, who was Ron Lancaster. When I left the job, they gave me a uniform - I still have it to this day - and a signed football from the team of 1977."

7. You must have been good luck for them, because they went to the Grey Cup in 1976, although they lost to Ottawa on Tony Gabriel's historic touchdown catch on the last play of the game.

"I remember that vividly. A sidebar to this is that Gabriel is now an investment adviser, living in Oakville, where I live. We have lunch periodically. He's a very good guy."

8. Where did you go from Regina?

"My wife and I moved to Calgary.

I was only there six weeks before moving up to Edmonton in 1979. Then in 1980, I moved to Grande Prairie and looked after one of the largest projects for our company at the time, a provincial courthouse. It was one of the largest firm-price contracts the company had ever undertaken.

"From there, I went back to Edmonton and became the assistant manager in 1981 and became manager in 1984 of Edmonton. Then the boom went to bust and construction wasn't doing very well. They merged the Calgary and Edmonton offices of our company, and I was the odd man out. My choice was either to move to Toronto or find another job. It took a lot of negotiations with my wife. She finally agreed to come down this way. I came here as the assistant manager in '85, was named manager in '87 and then I became president and (chief operating officer) in '88. I became CEO in 1991 and chairman of the board in 2001."

9. What ultimately enabled you to advance?

"I think part of it was being in the right place at the right time. Our company has been around since 1920. Through the '80s, it fell on hard times and it wasn't going well. The second-generation owners of the company, along with a third-generation owner, were looking at the options of what to do. They decided to sell, and they started looking at that option in late '87 and early '88. The company was going to be sold for roughly $1 million in the spring of 1988. (But) the potential buyer, although extremely close, didn't get all of the shares and ended up walking away from the deal. The owners of the company had to do something to restore the confidence of the marketplace. They had looked internally and externally for a new president and neither worked out very well. After the failure of the sale, they again looked internally and, for whatever reasons, decided to select me. I went from being manager of the Toronto branch to president in a very short period of time. We were probably on the verge of bankruptcy. I felt pretty intimidated. But we got the guys together. A real strength of the company was a great number of long-term employees with the company had a lot of experience."

10. What made your company successful?

"It really was creating that team environment, putting in place a profit-sharing plan that allowed the employees to share in the success of the company, putting in place an employee- ownership process that allowed the employees to have a stake and, again, to share in the results and more closely align our goals. There were three things that I found the most challenging. The first was trying to negotiate the transfer of ownership from a family-owned company to, substantially, an employee-owned company. We did that in 1996. The next most challenging event in my career was the income-trust conversion. The third most challenging, and probably most interesting, event was our first acquisition that we made early this year of a construction company in Atlantic Canada by the name of Rideau Construction. When I say they were the three most challenging, they were probably also the three most rewarding events in my career, too."

11. How is your company dealing with the rise in concrete prices on oilsands projects?

"Typically, on an oilsands project, the clients provide their own batch plant and supply the concrete to us. That way, they control price fluctuations. They will produce the concrete onsite and sell it to us at a fixed price. What fluctuates now is your labour cost, your material cost and what kind of efficiencies you can achieve in a rather buoyant marketplace. Also, there is a huge shortage of skilled-trades labour - not just in the oilsands, but across Canada."

12. How is your company dealing with the labour shortage?

"The area where we're probably most seriously affected is in the office. There's a huge shortage of office staff. We're really paying a lot of attention to the universities and colleges. We're going to every career fair there is, and we're putting programs in place to attract and retain the people in the office as much as we can."

13. What are you doing in your role as CCA chairman to offset the labour shortage?

"We've tried to focus more and more on the skilled trades and office professional staff shortage by developing a closer liaison with the Association of Canadian Community Colleges. We recognize that they are our greatest source of employees, because the colleges are the entities that have all the facilities for developing skilled trades and (courses) that will produce office staff."

14. Does your company offer any bursary programs?

"Our company has a scholarship program at Red River College, where I graduated. We've had a scholarship program there since 1968. On that front, my wife and I also created an endowment fund that encourages high-school students to get into civil technology. We were very fortunate to be able to do this. We now have the largest endowment fund at Red River College. It's needs-based. For me, personally, that's all about that $200 bursary that I received in 1965 and led me to be where I am today. My wife and I have this philosophy that you need to give back to the community that allowed you to be successful."

15. In your view, how much of a factor are immigrants when it comes to meeting the labour shortage?

"That's another area of CCA's involvement. Immigration is huge. When you take a look at where most of the skilled trades came from in the '40s and '50s and '60s, they were from European countries where skilled trades were a very dominant factor. When they came to Canada, they brought all those skills with them. Well, immigration has changed over the years. It's moved away from Europe, and now the focus seems to be more on other countries that have different skillsets. They probably have more technically inclined people. So immigration is a bit of a problem for our industry. The CCA is lobbying the federal government to get the policy changed. They've put more focus on the temporary worker - which helps. But we need to speed up the permanent-immigration process and we also need to change the points system."

16. Some union leaders have argued that the temporary foreign worker program is not fair, because it does not give workers a chance to stay in Canada permanently. What's your view?

"If they're saying that, I would absolutely agree with them. We are really looking for permanent workers. I don't think we're looking to hire them just because they are temporary. Immigration laws should be changed to facilitate them becoming permanent workers."

17. Why is the CCA calling for a new federal public-private partnership (P3) agency?

"Well, we weren't necessarily calling for that. That's a spinoff of what we were calling for. From the Canadian Construction Association's perspective, the federal government has, more or less, been ignoring our Canadian infrastructure. The provincial governments, too, have been ignoring our infrastructure for decades. Facilities would get built and they were not properly maintained as they should have been.

They weren't being replaced as often as they should have been. As a result, we have built up a huge deficit in our infrastructure. What we've been lobbying the federal government for is to renew our infrastructure. Spend money - commit money - to infrastructure renewal. Prior to getting elected, the Conservatives were consulting with industry.

"Obviously, with our industry representing 12 per cent of GDP, they listened to us. Most of the provinces have dedicated billions of dollars to infrastructure renewal and set up their own (P3) structures, like Infrastructure Ontario, Alberta Infrastructure and Partnerships BC."

18. What's the CCA's view about whether P3s deprive small contractors of work?

"It's a concern. There has to be a balance somehow. In order to make these (P3s) viable, they have to have a certain size because of the cost implications. They've bundled some of these projects together.

For example, in Alberta, the provincial government took 18 schools and bundled them into one project. Obviously, this has an impact on the smaller contractor. One of these schools might be $15-$20 million and a smaller contractor could bid on that school. When the project gets to be 18 schools, obviously they're going to be precluded from participating. So it is a problem."

19. What is your outlook for the construction market in B.C., Alberta, Saskatchewan, Manitoba and Ontario?

"In B.C., we see the market continuing to be reasonably buoyant. There's a fair amount of spinoff work coming available because of the 2010 Winter Olympics. Alberta is still very buoyant, particularly in the oilsands. We don't see any slowdown there at the present time. We don't operate in Saskatchewan at the present time, but from my perspective, it looks like it's reasonably strong, as is Manitoba.

I think Ontario is slowing because of the impact of the manufacturing sector on the marketplace."

20. What would you do if you weren't running your company anymore?

"I'd probably get heavily involved in charity work - even more heavily involved than I am now. I'd probably sit on more boards, either as a volunteer or on corporate boards. I don't know if I could divorce myself completely from business. I've been pretty heavily involved in the corporate world for the last 20 years. I've always considered myself a very hands-on person. I think I'd like to stay involved in some fashion."

Paul Charette

* Title: Chairman and CEO, Bird Construction Co.

* Born/raised/age: Winnipeg/61.

* Education: Charette graduated from Red River College in Winnipeg with a diploma in civil technology in 1967. He also has a certificate in computer programming from the same college.

* Family: Married to Gerri Charette. No children.

* Career: After graduating from college, Charette began his career in Manitoba with Crippen Acres, a consortium that included H.G. Acres of Niagara Falls, Ont., and G.E. Crippen and Associates of Vancouver. After nine years with Crippen, Charette joined Bird as a project co-ordinator and moved to Regina.

* Moonlighting: Charette serves as chairman of the Canadian Construction Association, which represents approximately 20,000 companies in the non-residential sector. He also sits on the board of the Junior Achievement Canada Foundation/Canadian Business Hall of Fame and serves on the Toronto Construction Association's general contractors' advisory committee. He is a past director of Toronto's Bridgepoint Hospital.

* Awards: Charette was named Ontario's real estate and construction entrepreneur of the year by Ernst and Young in 2004. He is also a Red River College distinguished alumnus.

* Passions: Gardening.

Bird Construction

* Brass: Paul Charette, chairman and CEO; Paul Raboud, president and chief operating officer; Stephen Entwistle, chief financial officer.

* Profile: Founded in 1920, Bird constructs buildings for the institutional, commercial and industrial real estate sector, more commonly known as the non-residential area. The firm operates seven offices across Canada, including its Toronto headquarters and branches in Saint John, N.B., Halifax, Winnipeg, Calgary, Edmonton and Vancouver. It also has an office in Seattle.

* Stats: Last year, Bird, an income trust, generated $756 million worth of revenue, with 90 per cent derived from projects in Canada. Bird reported net earnings of $33 million, or $2.42 per unit. The company has expanded dramatically since 1988, when it produced about $90 million per year in revenues.

* Recent Stock Price (TSX:BDT.UN): $38.71 (52-week range, $16.16-$39.99) * Website: www.bird.ca * HQ: 5403 Eglinton Ave. W., Toronto, M9C 5K6 * Phone: (416) 620-7122