Solving shortage of construction workers key to housing growth, experts say
TORONTO — Solving a longstanding construction worker shortage 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 construction labour shortage was cited by the Canada Mortgage and Housing Corp. as one of three factors contributing to longer construction times in a housing supply report-last month.
Along with larger project sizes and increasing costs, the agency said workers are retiring faster than they’re being replaced. This challenge was worsened by the pandemic, when some construction workers changed careers or retired prematurely rather than returning to the industry as the economy reopened.
“It’s been the monster in the woods for a long time. We’ve known this is coming,” said Jordan Thomson, senior manager of infrastructure advisory at KPMG in Canada.
“However, it’s reached a head now, in that there is a lot of work combined with just the reduction of the overall labour force.”
Thomson said the industry is facing the dual challenges of replacing workers as they retire while trying to grow the sector to address Canada’s rising need for homes.
Canadian Home Builders’ Association CEO Kevin Lee estimated 22 per cent of residential construction workers are set to retire over the next decade.
While the labour shortage is an ongoing challenge, he said its effects have been muted over the past year as high borrowing costs have led to a slowdown in demand from potential homebuyers in many markets. But he said arebound could lead to “more strain” on the sector.
“Once people are able to afford to buy and get moving and the market starts to turn around, at that point, we will really see the labour shortage be more and more of a crunch,” Lee said.
Canada could need more than 500,000 additional construction workers on average to build all the homes that will be needed between now and 2030, according to a report by RBC assistant chief economist Robert Hogue.
The report, titled The Great Rebuild, forecast the pace of housing construction in Canada would need to jump by nearly half just to meet future demographic growth. It offered seven ideas to fix Canada’s housing shortage, the first of which is to aggressively expand the construction sector’s labour pool.
Hogue said “all avenues 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 enrolments and incentivizing older construction workers to remain in the labour force for longer.