Canada needs to prioritize construction skills in immigrants to tackle housing crisis, RBC says
Prioritizing construction skills in new immigrants and embracing innovative designs and building techniques top a list of recommendations from economists at Royal Bank of Canada on how best to tackle Canada’s housing crisis.
“Canada could need more than 500,000 additional construction workers on average to build all homes needed between now and 2030 — and even more than that in the short term to meet peak growth in demand,” the economists said in a report released Monday.
To address the shortfall, the report suggests expanding the Federal Skilled Trades Program and giving more points to candidates based on labour needs, with provinces urged to follow suit. The report also stresses maintaining a dialogue between immigration authorities and the construction industry to address skill shortages.
Despite immigrants’ potential to earn above-average wages and integrate quickly, immigrants with apprenticeship certificates and those who practise non-apprenticeship trades made up only 2.4 per cent of arrivals from 2016 to 2021, down from 9.6 per cent in the 1980s. The report argues for a realignment of Canada’s immigration system to focus on those skilled trades.
At the same time, the report notes that the traditional approach to homebuilding is impeding efforts to meet housing demands and greenhouse gas emissions targets. As a result, RBC says there is an urgent need for the industry to embrace new approaches to enhance home production efficiency per worker.
One solution is to promote wider adoption of prefabricated housing, where entire homes or sections are built in factories. This method can enhance efficiency, shorten timelines and offer cost predictability. According to RBC, Canada is not progressing in this sector as quickly as other countries.
“Canada lags in the development of this industry compared to world leaders Sweden (where prefabricated elements are found in 84 per cent of detached homes), Germany (20 per cent) and Japan (15 per cent),” RBC said in its report.
Another strategy is to create a catalogue of pre-approved building designs, simplifying and accelerating the homebuilding process. This approach could be particularly beneficial for affordable housing and could help increase the stock of environmentally friendly homes.
Projects using pre-approved designs should receive expedited approval — something the federal government announced they would be launching in 2024.
In December, Federal Housing Minister Sean Fraser told reporters that the federal government would be creating just such a catalogue of pre-approved home designs, borrowing from a post-war housing initiative that led to the rapid construction of so-called “Strawberry box” houses or “victory homes.”
“In many instances, these homes were being built in a period of about 36 hours, and we intend to take these lessons from our history books and bring them into the 21st century,” Fraser said at a news conference in Ottawa.
The federal program, however, will also include designs for multiplexes and seniors’ and student housing.
While RBC recognized that several proposed measures are already underway, they maintain a cautious stance on affordability.