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Why Demand For Construction Workers In Canada Soaring?

Date Added: 27/08/2021

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Why Demand For Construction Workers In Canada Soaring?

Canada is witnessing a huge demand for construction workers as a fall out of the escalating housing demand and labour shortage. The demand for construction jobs and workers jumped 20.4 per cent since April 2020 compared to the average demand band of 16.4 per cent. 


Contractors hit by labour shortage 

Not just the West Coast of Canada that has experienced construction personnel shortage but the Atlantic Canadian provinces were also not spared.

In New Brunswick of Atlantic-Canada, many contractors are refusing work because they do not have skilled workers and it was an offshoot of the downturn in immigration due to Covid-19. 

Columnists like Peter Mitham have sought changes to immigration policies to attract more immigrants into the construction industry and address the skilled labour shortage.

The zooming demand reflected the jump of average weekly earnings by 9.5 per cent in the past year that is higher than the all-industry increase of 1.1 per cent. 

The Statistics Canada data says job vacancies in construction zoomed to a record 46,370 in the first quarter of 2021 from 39,425 in the final quarter of 2020. 

The job vacancies for construction workers are outpacing the supply. According to the latest data, trades with the largest annual increases in demand are masonry and plastering; carpenters and cabinetmakers; electrical and construction assistants.


Housing demand is very strong

Housing demand in Canada shows no abatement amidst rising construction costs and constrained supply. The strong demand and limited supply is exerting upward pressure on house prices.


Housing availability lowest in G7

According to the Residential Construction Council of Ontario Canada has the lowest rank in terms of housing units on a metric of a number of houses for 1,000 residents among the G7 countries.  The number has been falling for the past 5 years noted Richard Lyall president of the Rescon.

The home-buying frenzy in Canada had its trigger in the Covid pandemic season from 2020 pushing up sales and prices to new heights since March.


Housing sale listings down

Buyers are facing a dearth of new houses for sale. The country is grappling with the worst housing shortages as fresh supply became skewed.

Shaun Cathcart, the national real estate board’s senior economist has said the problem of high housing demand lingers and no immediate remedy is in sight.

There is a stark decline in housing listings across top cities such as Toronto, Vancouver and Montreal. The new housing supply has been down for the last three quarters. 


Rising number of construction jobs

According to the forecast by BuildForce Canada

Canada’s construction industry jobs will grow by 50,200 by 2029. It also factors in the anticipated retirement of 257,000 construction workers plus and the need to hire 307,000 new workers to manage the demand.

BuildForce Canada is a national organization representing many sectors of Canada’s construction industry. It provides labour market data and analysis, programs and initiatives to manage labour requirements and build capacity for Canada’s construction and maintenance industry. 

BuildForce Canada’s 2020–2029 report- “Construction and Maintenance Looking Forward,” says labour demand will multiply from 2020 onwards. It traces the demand growth to high capital expenditure on several infrastructures, public transportation, utilities, LNG pipelines, and health service projects in many provinces and cities. 

The report also anticipates new housing construction to resume in most provinces on the back of growing non-residential construction demands.

Bill Ferreira, Executive Director of BuildForce Canada notes Canada’s construction outlook had been strengthened by several ongoing investments in infrastructure and driving demand as well.

The construction labour market challenges also include the retirement of veterans and a shrinking pool of available youth for construction industry work.


British Columbia fastest growing market

British Columbia is the fastest-growing market in 2021 as spending on public transportation projects, pipelines, and work on the LNG Canada are in top gear.

Big projects in the Greater Toronto Area (GTA) and Southwestern Ontario are led by light rail transit (LRT), nuclear refurbishment, and other infrastructure-based initiatives.

Prince Edward Island is seeing a big expansion in housing projects, while Nova Scotia is adding more health care projects.

Interprovincial mobility is partial support to the peak shortage in British Columbia and Ontario, notes Ferreira. Bringing workers from provinces with softened market conditions can make a positive difference in solving the labour shortage.

The outlook says immigration-driven population growth will boost the housing sector through 2026. But that high pace of growth will moderate later on as retirements would douse the demand for new homes.

Even if new-home construction can soften, renovation requirements will rise jacking up construction employment by 17,200 workers in the 2020–2029 period.

Non-residential employment will also grow throughout the period. Major projects in the energy and utility sectors, public transportation, and institutional infrastructure projects will be the key drivers. 

Growth in retail and wholesale trade, the transportation and warehousing sectors, manufacturing would further boost construction of industrial buildings, while immigration-driven population growth maintains upward pressure on commercial and institutional construction.


Non-residential construction

Employment in non-residential construction is projected to rise by 33,100 workers, a jump of 6 percent over the previous period.

The development of skilled tradespersons in the construction industry takes many years and requires participation in apprenticeship programmes.

That means replacing retiring workers will take many years to avoid skills gaps. By 2029, an estimated 257,100 construction workers will retire. 

Considering that Canada’s construction industry will draw an estimated 227,600 first-time entrants in the age 30 and below the industry will still have a retirement-recruitment gap of 29,500 workers.

The surging demand growth will make a shortage of 82,400 workers by 2029. The long term solution will be training and apprenticeship programs to ensure greater enrolment of qualified trades-people to make a skilled labour force pool for the long term.

In 2019, Canada’s construction industry had 1.1 million tradespeople, in which women constituted 4.7 per cent and New Canadians 18 per cent.

In the coming decade, Canada is expected to admit 330,000 newcomers every year and immigrants will be a bigger source of potential employees.

The construction industry has to take the call and start recruitment, training and work on ways to retain young workers, irrespective of labour market trends, suggests Ferreira. 

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