Framing Canada’s Construction Labour Shortage

Framing Canada’s Construction Labour Shortage

By: Matthew Bradford

It’s little news that the Canadian construction industry is in the grip of a years-long labour shortage. Thanks to a 2023 report from BuildForce Canada, however, sector stakeholders have a more up-to-date view of how severe that shortage has become and what can – or already is – being done to curtail its impacts.

According to Statistics Canada, Ontario’s construction labour force contracted by 8,100 workers between 2019 and 2021.

BuildForce’s report reframes the immediate need for skilled tradespeople across the construction sector, including the transportation infrastructure, both to keep up with growing activity and replace exiting workers. In Ontario alone, the study says construction companies will have to recruit approximately 118,900 workers if it hopes to keep pace with sector demands as nearly 18 per cent of the current labour force (82,600 workers) prepares for retirement.

And while the study goes on to note the industry will be successful in attracting nearly 88,400 recruits, the remaining 30,500 will likely need to be recruited from the workforces of other provinces, or from other industries where workers with the skills the industry needs have been displaced, as well as through enhanced promotion to underrepresented demographics (e.g. newcomers, women, Indigenous, etc.) and through the direct recruitment of individuals from abroad.

Ontario is not alone in its skilled labour needs. As Bill Ferriera, Executive Director of BuildForce Canada, noted during his presentation at ORBA’s 2023 conference, jurisdictions across Canada are also looking to replenish their ranks. ››

“What we saw last year is not unique to Ontario,” says Ferriera. “Ontario is certainly one of the most impacted markets, but we saw a drawdown in unemployment rates across the country.”

The labour crunch is a result of converging factors. There are the usual suspects, such as workers retiring en masse and tepid interest in the trades among younger generations. Then there are more recent factors, including fast-growing demand across all construction sectors, particularly in residential housing, which is becoming a significant pull factor on the industry.

“Historically, while the infrastructure transportation sector has been able to draw in a set number of individuals on an annual basis, there’s no guarantee that we’re going to be able to continue to do that in the future as all industries are experiencing similar retirement rates and aggressively recruiting younger workers,” says Ferriera. “That means the competition for talent will become extremely competitive and employers will need to look beyond traditional recruitment channels to find the workers they will need to keep pace with construction demands.”

It doesn’t help that Canada’s current demographics are not in the industry’s favour. BuildForce’s report indicates the share of the country’s labour force aged 65 and over rose from 15 per cent in 2012 to 19 per cent in 2022, with many in that cohort already in or nearing retirement. Meanwhile, a further 20 per cent of the population is now between the ages of 50 and 64, while only 16 per cent of the population is 15 years old or younger. That means over the next 15 years, more individuals will retire than there are young people available to replace them.

Shortening the gap

The labour shortage has been a persistent challenge, but the construction industry has not stood idle. In recent years, employers and industry groups have ramped up their efforts to draw more talent to the trades through awareness campaigns, training and educational initiatives, or collaboration with public sector allies to create more visible and accessible career pathways.

Certainly, creating pathways for young people and newcomers into construction is among the most effective strategies. And today, initiatives such as BuildForce’s Construction Career Pathways, the Canadian Construction Association’s Talent Fits Here program, ORBA’s Road Building Academy, the Ontario Construction Careers Alliance, and the Canadian Apprenticeship Service are working diligently to make those connections.

“Those heightened industry recruitment efforts are seeing success,” reports Ferriera. “The industry has been quite aggressive for more than a decade now in promoting careers in the trades, and governments have also been paying more attention to the issue and lending their support, which is also nice to see and is making a difference.”

The proof is in the numbers, he adds.

According to BuildForce’s labour report, the industry has successfully increased its number of young workers under 25 by 7 per cent since 2019. The percentage rate of women entering the industry is also on the rise, with the number of female apprentices rising to 666 in 2021, compared to 498 just a few years prior.

“It’s still a small share, but we have been seeing those percentages grow over time. That speaks well of the marketing the industry has been doing, but also the work being done among industry advocates and governments to try to change the perception of careers in the skilled trades,” says Ferriera.

“Overall, we’re starting to see a positive sea change when it comes to attitudes towards skilled trades,” he adds. “That is going to lead to some additional recruitment, but not yet to the levels required to address the retirement of those Baby Boomers and Generation Xers that we anticipate seeing over the next ten to fifteen years.” ››

There are certainly some optimistic trends concerning labour recruitment. Yet, as BuildForce’s report rightly points out, completely addressing the industry’s labour gap will rely on extended efforts to engage demographic groups that have been historically underrepresented in the field. That not only includes women and workers from Indigenous communities, but also the newcomers who are coming into Canada in increasing numbers.

As BuildForce states: “New federal immigration targets, announced in November 2022, call for the addition of 465,000 permanent residents in 2023, 485,000 in 2024, and a further 500,000 in 2025. These new targets should support further growth in the core working-age group of 25 to 54 years and may help moderate labour market pressures over the next decade. They will also require domestic industries to improve their recruitment of newcomers to supplement their traditional domestic recruitment programs.”

Immigration undoubtedly remains a key driver of population growth. Nevertheless, says Ferriera, there appear to be disconnects when it comes to linking those new arrivals to opportunities in construction.

“We know that newcomers now make up 27 per cent of the overall labour force in Canada today. In the construction industry, however, they represent under 20 per cent. That indicates we are not getting our share of newcomers into the industry, and that’s something that we have to do a better job of if we’re going to be able to keep pace and ensure that the acute shortages we saw last year don’t become chronic,” says Ferriera.

Moving forward, industry players will be compelled to find more effective ways of connecting with newcomers, enticing them into the trades, and creating workplaces in which they feel welcome and empowered. To that end, employers can begin by forging greater relationships with newcomer settlement organizations (e.g. COSTI) while governments can go further in making it easier to source and place new arrivals in construction roles.

“We need a policy environment that supports bringing in individuals with construction experience, because there’s no point in trying to convince, say, a doctor who just arrived in Canada that they should consider a career as a carpenter,” says Ferriera. “That might work on the odd occasion, but it’s much better to bring in individuals who have construction experience and want to work in the construction industry. Those are the kinds of individuals that we need to ensure are also coming into Canada in numbers sufficient to meet the needs of the workforce.”

At the turning point

There is plenty of work to be done in Canada. Between postpandemic backlogs, Canada’s net zero transformations, the urgent call for more housing, the Doug Ford government’s ambitious transportation infrastructure agenda, and a wealth of nationwide construction demands, the need for skilled talent isn’t likely to fade any time soon.

“It’s a really good time to be in construction,” agrees Ferriera. “There’s a significant volume of work already out there, but we need to find the people who will take it on.”

Certainly, as the labour shortage intensifies, industry players across the sectors and all levels of government will need to continue –and accelerate – their strategies for engaging and retaining the people that will keep their teams intact.

Matt Bradford is an industry writer for the Canadian construction industry. He can be reached at mirbradford@gmail.com.