Achi news desk-
Solving a long-standing shortage of construction workers will be key to boosting housing supply, experts say, as Canada’s national housing agency continues to forecast housing start levels that fall short of growing demand.
The Canada Mortgage and Housing Corp. referred. to the growing construction labor shortage as one of three factors contributing to longer construction times in a housing supply report last month.
Along with larger project sizes and rising costs, the agency said workers are retiring faster than they are being replaced. This challenge was exacerbated by the pandemic, when some workers changed careers or retired early rather than returning to the industry as the economy reopened.
“It’s been a monster in the woods for a long time. We’ve known this was coming,” said Jordan Thomson, senior infrastructure advisory manager at KPMG in Canada.
“However, it’s kind of coming to a head now, in the sense that a lot of work has been combined with just reducing the overall workforce.”
Thomson said the industry faces the twin challenges of replacing workers as they retire while trying to grow the sector to address Canada’s growing need for homes.
Canadian Home Builders Association CEO Kevin Lee estimated that 22 per cent of residential construction workers will retire over the next decade.
Although the labor shortage is an ongoing challenge, he said that its effects have been somewhat muted over the past year as high borrowing costs have led to a slowdown in demand from potential home buyers in many markets.
But he said their capitulation could lead to “more stress” on the sector.
“Once people can afford to buy and move and the market starts to turn around, then we will see the labor shortage become more and more of a squeeze,” Lee said.
Canada could need more than 500,000 additional construction workers on average to build all the homes it will need between now and 2030, according to a report by RBC assistant chief economist Robert Hogue.
The report, titled “The Great Rebuild,” predicted that the pace of housing construction in Canada would need to jump by nearly half just to meet future demographic growth. He proposed seven ideas to fix Canada’s housing shortage, the first of which is to aggressively expand the construction sector’s labor pool.
Hogue said “every avenue should be pursued to get more people working in the sector,” including prioritizing construction skills among new immigrants, setting “ambitious” targets for skilled trade school enrollments and incentivizing older construction workers to stay in the workforce for a longer period.
“If not addressed by, for example, attracting more people to trades and allowing more trade immigrants into our country, this could slow down the process of solving our affordability and housing crisis,” Hogue said in an interview. .
“We need to build a lot more.”
The federal budget presented on Tuesday acknowledged that a shortage of skilled labor is contributing to the “entrenched structural barriers” that are holding back new housing supply and adding to affordability pressures.
The government said it would encourage more people to pursue a career in the skilled trades and break down barriers to foreign credit recognition, particularly for construction workers.
It noted the creation of apprenticeship opportunities “to train and recruit the next generation of skilled craft workers.” The budget included $200.5 million earmarked in 2025-26 for a summer jobs program “including in sectors facing critical labor shortages, such as housing construction.”
While some strategies being developed are aimed at the long term, prioritizing immigrants with skilled trades backgrounds could give the sector a faster boost, said Mary Van Buren, president of the Canadian Construction Association.
He said skilled trades workers represent about two per cent of new Canadians. Although some steps have been taken to correct that imbalance, he said the points system Canada uses in evaluating immigrant applications still favors those with higher education.
“You can’t create a carpenter or a crane operator or a project estimator overnight,” Van Buren said.
Finding solutions is essential not only because of the immediate need – the association has 52,000 active job openings – but to help Canada compete with other countries for skilled trades workers.
Van Buren noted that Canada is not alone in trying to solve a construction labor shortage.
“The United States, the UK, Germany, Japan, Italy, France, face a similar challenge, and all but Japan rely heavily on immigration,” he said.
Lee said another fix could involve moving to more factory-built homes over the medium to long term.
“We will need to increase productivity and typically that needs to be done through machines or robotics, automation, that sort of thing,” he said.
Then there’s no doubt we’ll need more people, but we’ll also need more factory building to help fill the gap.”
Some 86 percent of business leaders in real estate and construction say that, despite the influx of immigrants, their organizations lack the skilled talent they need to grow, according to a February survey by KPMG on priorities ahead the federal budget.
Thomson said that underlined the need to do things differently, rather than waiting for the workforce to increase. He pointed to the rise of prefabricated homes and modularisation, along with more digital tools meant to improve productivity on construction sites.
“That’s going to take time to bring more people online and get them through apprenticeships and all these things. We don’t have time to do that, to be honest,” he said.
“The thing that’s going to help get things done faster is the way we build things. We need to explore different ways of building houses and delivering these hugely complex infrastructure projects with less.”
This report was first published by The Canadian Press on April 18, 2024.
