Canada is losing tens of thousands of construction jobs even though it is hitting immigration targets. This shortage has become a significant threat to the nation’s economy, impacting various sectors that rely heavily on skilled labour, such as construction and manufacturing.
Canadian Manufacturers and Exporters (CME) economists estimate the skills shortage in the manufacturing sector cost the Canadian economy about $13 billion in 2022 in lost contracts and delayed investment. Statistics Canada data shows that the construction industry lost 45,000 jobs in July 2023.
A February 2024 Statistics Canada report noted that more workers were building houses, but labour shortages persisted. It said that besides zoning, fees, permits, cost of materials, and other challenges involved in projects to meet the demand for housing, having enough labour and wages are common concerns. The agency said even with a decline in vacancies for plumbers, pipefitters and similar categories, more trade helpers and labourers were still needed.
The crunch in the $165-billion industry is a crisis that needs urgent attention. This shortage slows economic growth and affects the country’s ability to meet its infrastructure goals, including housing development, which is crucial given the current housing crisis in many Canadian cities.
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Construction delays are becoming more common across the country, and businesses struggle to find qualified workers to meet their needs.
A recent survey by CME revealed that over 60 per cent of companies have experienced economic losses because of this shortage, with over 40 per cent having to cancel planned expansion projects. According to the C2C Journal, this has reduced economic output and increased consumer prices, as the scarcity of skilled workers drives up labour costs.
The shortage is contributing to inflationary pressures. As finding skilled trades becomes more challenging, the cost of services these workers provide, such as plumbing, electrical work, and construction, is rising. This is particularly concerning amid Canada’s ongoing housing affordability issues, where higher construction costs are passed on to consumers, making homes even less affordable for many Canadians.
Retirement, Education And Training, And Immigration
An aging workforce and a need for younger replacements contribute to this shortage. Experts say a retirement wave could worsen the situation. According to Employment and Social Development Canada, about 700,000 of the four million Canadians who work in the trades are expected to retire by 2028.
More focus on vocational training and apprenticeship programs is needed to ensure students are trained in vital skills. This shortfall directly affects the number of younger workers needed to replace retirees.
Societal perceptions and attitudes toward skilled trades stigmatize trades as less prestigious than university degrees and as less desirable career paths, making the industry less attractive to students. Many parents and educators continue to steer young people towards academic rather than vocational paths despite the high demand and lucrative opportunities in skilled trades.
Another contributing factor is the underrepresentation of women and minorities in the skilled trades. Although efforts have been made to diversify the workforce, progress has been slow. Women, for example, make up only about 6 per cent of apprentices in construction, manufacturing, and transportation trades.
Lifting cultural and workplace barriers could encourage these groups to pursue trade careers and make them accessible to the pool of potential workers
There is a lack of adequate immigration policies to attract skilled tradespeople from abroad. Canada’s immigration policies are not targeted at attracting skilled tradespeople to fill the growing labour shortage.
Potential Solutions
Addressing the skilled trades shortage will require a multi-faceted approach in policy and cultural shifts.
Stakeholders such as firms and college instructors have called for rebalancing Canada’s workforce with more skilled worker recruitment changes in the education system. Greater government funding for vocational education and apprenticeships and recruiting people from non-traditional backgrounds could help ease the labour shortage.
One crucial step is to reform the education system to promote vocational training as a viable and respected career path. Programs integrating apprenticeship opportunities into high school curricula, such as Ontario’s Focused Apprenticeship Skills Training (FAST) program, are a step in the right direction.
Students entering Grade 9 in September 2024 will be required to earn a Grade 9 or 10 Technological Education credit as part of their Ontario Secondary School Diploma to help them consider a future career in the skilled workforce, including the skilled trades.
Efforts must also be made to recruit more women and minorities into the trades. Creating more inclusive and supportive work environments is essential to retaining these workers. Programs aimed at reducing workplace harassment and providing mentorship could help to increase the retention rates of underrepresented groups in the trades.
Simon Gaudreault, chief economist and vice president of research for the Canadian Federation of Independent Business (CFIB), said the shortage’s impact could affect anyone. He told CBC that the trades are “underappreciated” careers but vital to the economy and individuals.
Boosting the industry through immigration could include reducing the barriers to entry for foreign-trained workers, such as recognizing international qualifications and offering more streamlined pathways to permanent residency for skilled trades immigrants
Canada must find new ways to attract immigrants by overhauling the selection system. By 2023, 21 per cent of the workforce will be retired, requiring 352,000 construction workers. According to Bill Ferreira, executive director of BuildForce Canada, even with 226,000 expected to join the workforce, the industry could be short 85,000 workers by 2033.
“Closing this gap will require the industry to hire from a variety of sources, including from among the hundreds of thousands of new permanent and non-permanent residents that are projected to be admitted to Canada in the coming years. The difficulty is the system does not currently support this objective,” Ferreira said.
Publications and stakeholders have raised concerns, and Canada must act fast to change the direction to rectify this pressing issue that is threatening the country’s economic well-being. Stakeholders need to take immediate and comprehensive steps to address the issue. Without immediate action to attract and train new workers, the country risks facing prolonged economic disruptions, higher costs, and a subsequent decline in living standards. By reforming education, promoting diversity, and leveraging immigration, Canada can address this critical workforce gap and secure its economic future.
