Construction industry group BuildForce predicts a wave of retirements in the coming years, with an estimated 257,100 construction workers expected to leave the work force by 2029.Cole Burston/The Canadian Press
A shortage of tradespeople in Canada’s construction industry continues to worsen in major urban centres from coast to coast. Developers are looking at cancelling projects, costly delays and new tactics to secure a reliable supply of skilled workers.
Rob Ramsay, executive vice-president and national lead project and development services at JLL Canada, says the shortage is affecting “a heated construction market.”
“It further reduces supply, causing incrementally higher contractor pricing,” he says. “Trades are also hiring inexperienced workers in an effort to keep up. As a result, the work can be executed incrementally slower and more poorly, which could elongate the schedule and add further cost and frustration.”
Looking ahead, it is unlikely the issue will be resolved without more intervention from government, unions and trade associations, he says. If the current situation doesn’t improve, Canada could be facing a shortage of 100,000 tradespeople by 2029, Kieran Hawe, chief operating officer of construction services company EllisDon Corp., told The Globe and Mail in February, 2021.
Contributing to the shortfall is a coming wave of retirements. A report titled 2020–2029 Construction and Maintenance Looking Forward from BuildForce, a national industry-led organization, estimated 257,100 construction workers will retire by 2029.
Add to the mix a decline in apprentice enrolment across the board for skilled trades in general. Over the next five years, 256,000 new apprentice recruits are needed to keep pace with demand, according to the Canadian Apprenticeship Forum.
“As we experience further population growth in Canada, the construction industry will continue to be strong, and the problem will continue to persist unless action is taken,” Mr. Ramsay explains. “Careers in trades can be rewarding for many. More effort in marketing careers in trades needs to be put forth by trade associations, unions and institutions that offer training for trades, supported by government.”
He says the government should look at providing additional funding for training and immigration strategy to stimulate an increase of tradespeople at the grassroots level in Canada.
On Nov. 1, the federal government announced it will introduce new selection tools in 2023 to help the immigration system target health care and construction – two sectors that have the highest need for labour. Immigration targets have been increased over the 2022 level of more than 430,000 immigrants to 465,000 in 2023, 485,000 in 2024 and 500,000 in 2025.
In the meantime, companies like JLL are relying on building relationships with quality builders and traders. “It is something that we have always done,” Mr. Ramsay says, “and it is more important now than ever. We also carefully vet the project teams that builders and trades propose, and request changes when we feel it is in our clients’ best interests.”
Big developers in commercial real estate are facing serious challenges as they attempt to navigate their way through the current shortfall in skilled trades. “It is among the biggest issues facing the construction industry today that sits equally with inflation, supply chain disruptions and cost uncertainty,” says Jason Annibale, co-leader of construction and infrastructure with business law firm McMillan.
He says many files on his desk are related to cost overruns and delays inherited from the COVID-19 pandemic and the labour shortages. It is causing some contractors to turn down projects because they don’t know if they’ll have the capacity to execute them.
From a legal standpoint, contractors and developers should tread carefully and enter contracts fully aware of the risks they are taking on, promised delivery dates and price pressures. “You’ve got to put in effective cushions and escape valves,” Mr. Annibale says. “If you’re a contractor and you promise to deliver at a certain price, and you’re not able to do that, then you’ve accepted the risk for that.”
Contractors could be on the hook for delay liquidated damages if the owner of a retail site loses income because the location isn’t open on time. On the flip side, construction companies can earn bonuses if the project is completed earlier than agreed.
Though he feels the labour shortage in construction will continue for a few more years, Mr. Annibale is optimistic it will eventually be resolved. “The construction industry is very smart,” he says. “It will solve the problem by tapping into underrepresented groups to provide skilled labour, including women, First Nations and new Canadians. That will mean a culture shift for the positive on construction sites and in the industry generally.”
The future for construction remains strong, Mr. Annibale says.
“You see so many cranes everywhere,” he says. “You have commitments from provincial and federal governments to continue spending not just in housing, but in infrastructure. Despite the shortage of tradespeople and talk of recession, I don’t see things slowing down any time soon.”
Minding the gap: new initiatives aim to fill the skilled trades void
With the demand for tradespeople showing no signs of waning, more steps are being taken to ensure the construction industry has the help it needs. Here are a few highlights:
- Level Up! is a series of career fairs organized by the Ontario government. They will highlight 144 skilled trades and target students in Grades 7 to 12 through interactive activities and presentations from tradespeople and local employers.
- In September, 2022, the British Columbia Construction Association launched Building Builders, a program that connects under- and unemployed workers with experienced mentors. It will run for three years and will support 300 mentees through a 12-month mentorship period. The aim is to help newcomers enter the industry.
- Alberta announced a campaign last month to raise $15-million in scholarship funds that will support students through BILD Alberta Scholarships for Construction Careers.
- Beginning in 2023, the federal government is investing up to $55-million over five years under its Stream 2 (Innovation in Apprenticeship) of the Union Training and Innovation Program (UTIP). It will help fund projects that seek to improve the participation of apprentices in Red Seal trades who are women, newcomers, persons with disabilities, Indigenous people and racialized individuals.
- Next year, the Government of Canada is also set to start spending up to $43.5-million to support projects that aim to recruit and retain female apprentices under the Women in Skilled Trades Initiative. It covers 39 Red Seal trades, mainly those found in construction and manufacturing.