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APRIL 2016
Unfair competition from government-subsidized labs
Imagine government coming along and giving your competitor millions of dollars to build a new facility and purchase state-of-the-art equipment. The money never has to be repaid.

Now imagine that this laboratory starts to offer the same testing services that your company has been providing for years. Would you consider this unfair? And would the publicly-subsidized lab present a real threat to your business?
 
Of course! But this is a nightmare scenario that would never happen.
 
Think again. It’s exactly the situation that has unfolded in London, Ontario, where, incredibly, Fanshawe College has been awarded $8 million in federal funding to build and operate a testing facility that will compete directly with our members.


Fanshawe College’s Canadian Centre for Product Validation (CCPV)

How is this possible? Why is Ottawa funding an initiative that will harm existing businesses? And why is Queen’s Park, which expressly forbids colleges from competing unfairly with the private sector, allowing this to happen?

These are questions we have been asking, and no one in power seems capable of providing an answer – not federal Innovation, Science and Economic Development Minister Navdeep Singh Bains, who is responsible for FedDev Ontario, the agency that awarded the funding; and not Ontario Training, Colleges and Universities Minister Reza Moridi, who seems aloof and uninterested in addressing our concerns.

Recently, our sister association in the U.S., the American Council of Independent Laboratories, has joined us in this fight. ACIL is worried that Fanshawe’s new Canadian Centre for Product Validation (CCPV) will be competing with its members as well and views this as a possible issue under the North American Free Trade Agreement.

There are other government-funded laboratories and research centres in other parts of Canada that pose a similar threat. This is a growing problem. Together, we must defend against what can only be described as an illegal and unjust expropriation of our businesses.
An Interview with Alnoor (Al) Nathoo


Alnoor Nathoo is a Principal Consultant and Past President with Peto MacCallum Ltd. with over 42 years of experience in the laboratory testing sector. He served on CCIL’s Board of Directors for some 20 years and was President from 2011 to 2013. He recently spent some time with Lab Watch reflecting on the past, present and future of the industry. 

Q: What are some of the big changes that have fundamentally altered the industry over the years?

A: I think the most positive development has been the voice and recognition that the testing industry has earned through advocacy efforts and administration of certification programs by CCIL. 

I’ve also seen a lot of positive changes in health and safety practices. When I was first starting out, we handled dangerous materials, such as asbestos and trichloroethylene, without realizing the negative health impacts. Now, there is a much greater recognition of health concerns both in test procedures as well as laboratory practices, which is a great thing.

On the negative side, I have seen increasing commoditization of the testing industry, with testing being viewed less as a professional service and more as a commodity to be acquired for the lowest price.

Q: Which achievement are you most proud of during your time as President of CCIL?

A: We were very successful in our efforts to protect the industry from the burdensome costs and red tape that would have resulted from proposals by the Canadian Nuclear Safety Commission.

The CNSC wanted users of portable gauges, many of whom are members of CCIL, to post financial guarantees totalling some $14 million to cover the cost of any remediation or disposal of these devices in the event of a licensee going out of business. This unreasonable demand would have tied up our members’ capital and severely restricted their growth. 

CCIL met with the Minister responsible and CNSC, provided alternative solutions, and ultimately defeated the proposal.

Q: Where has CCIL been focusing its recent advocacy efforts?

A: Two areas, in particular, have been a focus of attention – unfair competition from publicly-subsidized laboratories, and the lack of independent testing on P3 projects.

Increasingly, governments both at the federal and provincial levels have been funding research centres and laboratories that offer commercial testing services. This is not only a misuse of taxpayers’ money but a direct and unfair competitive threat to existing, private-sector labs.

Another concern is the lack of independent oversight on many public-private partnerships (P3) infrastructure projects. The responsibility for quality assurance on these projects has shifted from owners to contractors, and this creates potential conflicts of interest. If construction materials or methods are sub-standard, the government may have no way of knowing about these deficiencies.

CCIL has been very active on both of these fronts.

Q:  Looking to the future, what do you see as a critical challenge for the industry?

A: I believe the shortage of skilled labour will become even more of a challenge in the years ahead. The situation is made worse by the reluctance of many companies to hire foreign trained engineers. We need to be more receptive to engineers without Canadian education or experience.

When I first moved to Canada, it took me over 200 hand-written applications before I secured a job as a lab technician, despite being a trained engineer. However, once I was afforded the opportunity, I was able to prove myself and ultimately become President of one of the largest engineering companies in Ontario.

Lab Watch is a quarterly newsletter produced by the Canadian Council of Independent Laboratories. By opening this ‘window’ on our sector, we hope to engage government, industry and other stakeholders in an informed discussion of the issues.


CCIL represents the independently-owned, private-sector testing laboratories in Canada. Operating more than 330 facilities across the country, our members help ensure the quality and safety of highways, bridges, buildings, other infrastructure, manufactured goods, water, food, soil, air and more.





NEWSLETTER CONTACT:
Megan Stephens
mstephens@ccil.com 
416-777-0368
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