Labor Market Shortage Highlight: The Canadian Construction Industry

Ranking high as the fifth best country for living and working in as a construction worker, Canada is an increasingly attractive option for those who are looking for better professional opportunities as construction tradespeople. Speaking in purely economic terms, for example, construction workers make an annual $55,927 here; that is the third highest salary within the industry, globally (behind only Switzerland and the UK)!  

Canada’s demographic concentration in urban areas (with small- and medium-sized cities being home to 82 percent of the Canadian population) generates the need for year-round infrastructural development work in major cities. High-value projects are emerging nation-wide due to this, in both the private and public sectors; this includes a 16-km subway line between Ontario Place and the Ontario Science Centre, as well as the On-Corridor Works GO Rail Expansion program (which is valued at $15.7 billion). In total, the 2023 report on the top 100 public infrastructure projects are valued at $273B.  

Such high demand results in the employment of over 1.4 million people, and generates roughly $141 billion annually (7.5 percent of Canada’s gross domestic production). That is a large chunk of the national economy, accounted for by just construction!  

As the industry continues to grow, however, so do the number of job availabilities. In just the past decade, in fact, the number of construction jobs have increased by 50%. This has resulted in a severe labor crunch within the construction industry, wherein the government and private sector need “fresh thinking, actionable policies, and coordinated efforts” towards fixing the problem of nearly 80,000 vacancies.  

This issue has been further exacerbated by the fast-ageing workforce, with the share of construction tradespeople over the age of 55 having reached record-high numbers. As the average retirement age in construction is also lower than in other industries (owing to the physically demanding nature of the profession), this is a concerning figure.  

Skilled trades workers within construction are thus needed to step in and fill the gap, without which productivity would decline and project completion times would be unnecessarily prolonged. Since 1990, as an illustration, the number of months taken to complete construction for a project have steadily increased, and this trend shows no signs of reversal.  

So, what sources of labor can the Canadian construction sector turn towards? According to economists, the industry needs to diversify; while domestic training institutions are a solution, they need to be heavily coupled with new immigrants and foreign workers. This is because Canada’s registered apprentices and trade qualifiers has declined by 15 percent in the last decade, and there need to be strong encouragement efforts in place to reverse said trend.  

New immigrants currently constitute only 2.0% of construction workers in the country, and thus more efforts need to be made to facilitate their smooth transition into the Canadian infrastructural market. A more diverse and inclusive workforce is the only way to fill the retirement-recruitment gap of 61,000 workers, which would be left if first-time entrants are drawn from the local population.  

Signs of improved immigration measures are already being seen; in January of this year, Members of Parliament Peter Fonseca and Julie Dzerowicz announced IRCC’s permanent residence program for 1,000 out-of-status construction workers in the Greater Toronto Area (GTA). This is in recognition of construction workers’ importance to the Canadian socio-economic landscape, and allows them a path to permanent residency in the country.  

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