Time to tackle the looming trades shortage

Richard Lyall

The construction industry faces plenty of headwinds these days. Inflation, higher interest rates, material shortages, supply chain disruptions, and unprecedented and out-of-control wildfires have all posed significant challenges. However, the looming labour shortage is of particular concern.

Efforts are underway to boost the number of trades, but we are still facing a dire shortage and need to dramatically up our game. We must rapidly increase the number of individuals who are taking up the tools and tap into youth, women and underrepresented groups who could be a source of labour.

Although construction activity across the country is expected to contract slightly in 2023 and 2024, growth in both the residential and non-residential sectors is expected to pick up steam after that.

By 2032, construction investment is forecast to be one per cent higher than in 2022. The projections don’t take into account the federal government’s target to double the number of new homes built across Canada over the next decade, nor the anticipated increase in demand for services related to the retrofit of existing buildings to accommodate the electrification of the economy.

All this will put even more pressure on the already-taxed construction labour force. Despite all the efforts to date, economists and industry stakeholders still anticipate a labour crunch in the trades.

299,000 workers needed by 2032

By 2032, contractors in the Canadian residential and non-residential construction sectors are going to need up to 299,000 workers to replace retirees and keep up with the pace of growth, according to a forecast published by BuildForce Canada. That’s about 20 per cent of the 2022 labour force.

It’s anticipated Canada’s construction industry will draw 237,800 first-time entrants aged 30 and younger from local populations, leaving the industry with a recruitment gap of more than 61,000 workers.

The construction industry employs more than 1.4 million people and is critical to our quality of life. Presently, about one in every 13 employed people now work in the construction industry. The industry generates about $141 billion to the Canadian economy annually, or 7.5 per cent of our GDP.

The success of the industry depends on a pipeline of skilled workers, so it is critical that we make an ongoing commitment to apprenticeship. Unfortunately, we seem to be heading in the wrong direction.

Reports paint bleak picture

CIBC Economics warned in a recent report that the situation requires immediate attention as Canada is facing a staggering construction labour shortage.

Benjamin Tal, deputy chief economist at CIBC, noted the average number of workers per unit under construction has fallen from six to four over the past decade, which is hindering housing production.

With roughly 80,000 job vacancies in the industry across the country, more than half for specialty trades contractors, the vacancy rate is at a record high and a percentage point above the national average.

Disturbingly, figures in the CIBC report show that average tenure in the construction industry has also sunk to a record low, which smacks of a willingness among workers to jump ship in search of more money or better working conditions. Likely a byproduct of the shrinking labour force, projects are taking much longer to complete, with project timelines stretching to over 25 months in 2022.

The situation may get worse, as the share of construction workers over the age of 55 has reached a record high and the number of registered apprentices and trade qualifiers is down 15 per cent over the past decade. According to Statistics Canada, the largest drop in recent memory happened in 2020 when new apprenticeship registrations declined almost 29 per cent across the country.

Solutions to the problem

The primary solution with respect to on-site labour supply is immigration. We need to bring in immigrants with skill sets to work in construction.

We must also create greater awareness of the career opportunities in construction and build a more diverse and inclusive workforce. There were about 199,600 women employed in Canada’s construction industry in 2021. Of that, 27 per cent worked on site. Of the 1.16 million tradespeople in the industry, women accounted for just under five per cent of the on-site construction workforce.

Meanwhile, Indigenous people accounted for 5.1 per cent of Canada’s construction workforce in 2021, slightly lower than the 5.2 figure in 2019. Clearly, we must significantly increase efforts to reach and recruit youth from that community as the Indigenous population is the fastest growing in Canada.

We must also end the stigma around the trades and portray them for what they are – good-paying jobs that offer a secure future and solid prospects for advancement. We must start connecting with students at a young age and make them aware of the multitude of good-paying construction jobs. In Ontario, the good news is that the province’s efforts have been extraordinary.

For too long, parents and students have been told the only path to success in life is to go to university or college. The trades are a great option for students who don’t see themselves pursuing post-secondary education. They can earn while they learn and gain skills that last a lifetime. Apprentices can go on to careers in management or become a company owner themselves.

The trades offer endless opportunities. We must keep pushing programs and strategies to encourage more individuals to take up the tools. We are at the point where we can no longer just talk about the challenge and hope for the best. We must now pull out all the stops and walk the talk.

Richard Lyall is president of the Residential Construction Council of Ontario (RESCON). He has represented the building industry in Ontario since 1991. Contact him at media@rescon.com.