Top 10 Canadian construction trends to watch in 2023
By MARY VAN BURENConstruction Leadership
Canadian Construction Association president Mary Van Buren shares her insights into what to have on our collective radars as the next 12 months unfold.
1. Recession or ramp up?
The case for investing in infrastructure makes economic and social sense. As Canada and other countries seek to curb inflation, there will be more onus on governments to continue to invest. There are new highway and light rail developments, climate resilience retrofits, and vital maintenance projects underway as part of the nation’s growth plan. Risk can fluctuate in every construction project, but private investors are especially vulnerable in today’s market of escalating prices, supply chain disruptions, rising interest rates on loans, and challenges securing workers.
2. Where is the action on the federal promise to collaborate?
The federal government’s 2021 invitation to consult on Canada’s National Infrastructure Assessment was highly welcomed by the Canadian Construction Association (CCA) and our industry, but what happened?
We jumped on the opportunity to provide a national vision for infrastructure resilience, recommending a strategy that would identify needs and priorities based on independent expert advice. The consultations appeared to be a step in the right direction yet little concrete action has taken place since.
3. Rallying around increased investment in trade-enabling infrastructure
Canada’s reputation as a trading nation is in steep decline. In just 10 years, the country has fallen from 10th position to 32nd in terms of its trade transportation infrastructure. This is just below Azerbaijan and ahead of Turkey and Saudi Arabia. We need a massive scale-up in our country’s trade infrastructure.
The 2022 Federal Budget made some modest investments to improve supply chain infrastructure and support the existing National Trade Corridors Fund, but more is needed for Canada to remain globally competitive, expand into new and emerging markets, attract investors, and boost employment.
The industry has recommended a path forward, identifying and investing in Canada’s key trade gateways and corridors across the country that will link resources to industry, people to jobs, and products to market. It’s time to show that Canada can deliver the goods through a strategic trade infrastructure program.
4. Targeted immigration to build industry workforce capacity
It’s no secret that Canada is facing its most severe labour shortage in over 50 years. The situation is especially acute for the construction sector and its 81,000 open yet unfilled jobs. Retirements and recruitment challenges will be a heavy blow to Canada’ future economic growth if steps aren’t taken to rebuild Canada’s workforce now.
Training takes time and we need workers now. Immigration and temporary foreign labour can help alleviate the choke points, but to get there we need to modernize Canada’s immigration policy. While the federal government has pledged to increase immigration, it’s not just a numbers game. The current federal immigration point system does not favour the trades. Many newcomers cannot even find work in their field of expertise. We need to put their skills and experience to work and expedite the recognition of their training and credentials.
5. Renaissance of skilled trades as a valued career path
After years of relegating skilled trades to a career of last resort, governments and educational institutions are reinvested in promoting these careers.
The projected demand for skilled workers is far outweighing the number of people who are choosing to pursue a career in the trades. A report by the Canadian Apprenticeship Forum found that 75,000 new apprentices will need to be hired per year over the next five years to meet the demand for skilled journeypersons in Red Seal trades.
Smart investments are now being made to support businesses in offering apprenticeship training to Canadians from all backgrounds. The Canadian Apprenticeship Service is one such program that CCA is promoting, and it offers financial incentives to small and medium-sized employers who hire and train new first-year apprentices in 39 Red Seal trades. Schools and local businesses are also doing a better job at exposing youth to potential career paths.
This new appreciation for skilled trades combined with an infusion of new Canadians will help propel diversity and inclusivity forward, with greater representation from women, new Canadians, Indigenous and other equity-seeking groups.
6. New constraints for projects
Today’s financial climate and supply chain issues are forcing developers to rethink their project plans. Rising interest rates, taxes and debt financing are particular concerns, delaying or slowing down projects. Availability of bonding and insurance may also tighten.
Contractors will continue to face unpredictability in supply availability and costing. The war in Ukraine, the “Buy U.S.” initiative, massive infrastructure investment south of the border, and the potential for disruptions from climate related events all stand to impact the supply chain. It will be important to influence and monitor policies to secure a more resilient and green supply chain.
7. Green building takes a strong step forward
Over 120 countries, including Canada, are setting targets to limit emissions and decarbonize economies. With buildings representing almost 40 per cent of global greenhouse gas emissions, not to mention the environmental impact of heavy industry, Canada’s Green Building Strategy is looking to the Canadian construction sector to make a real impact on annual carbon dioxide emissions.
This is perhaps a once in a generation opportunity to make a quantum leap in building green. It requires mobilization of both private and public sectors, and all levels of government. Developing a buy clean policy, incenting businesses, mandating change through building code amendments, and deliberately including climate resilience in the project scope at the tender process should be considered. Education and training are also critical pieces of the puzzle, including access to better data, technologies, tools and standards as well as supporting workforce training programs geared towards low-carbon construction.
8. Uncertainty surrounding hybrid workplaces
COVID-19 significantly disrupted both employer and employee beliefs that the office is the centre of corporate culture and connectedness. Even before the pandemic, the construction industry began adopting digital tools and apps for the job site. With many firms only recently establishing rules of in-office presence, there will continue to be some tension between employers and employees as we navigate new ways of working together.
9. Automation is becoming essential
As self-checkouts replace traditional cashiers in grocery stores and pharmacies as a response to a lack of workforce, the construction industry will also be turning its attention to increased use of technology. With 81,000 job openings, and despite significant effort to recruit and retain a workforce, the business case for automation is strengthening.
Some companies are looking at robotics and new technologies, like exoskeletons and drones, as tools to increase productivity, growth and safety. As more technology is adopted in the industry, new types of jobs will be added within the sector – attracting new talent that wish to use cutting-edge technologies in the industry.
10. Collaboration gains strength
The value of involving contractors earlier in the project is gaining steam. Owners are recognizing that early engagement and collaboration can produce a more informed project plan, resulting in better pricing for risk and potentially identifying more efficient and effective ways of delivering projects.
This is a step in the right direction to updating Canada’s current procurement system to one that supports fair competition, long-term value and sustainability over low-cost bid, and shared risk. Too often contractors take on the majority risk of project costs and delays due to the shortage of workers, materials and supply chain disruptions.