Labour Shortage in Canada's Construction Industry in 2024

Canada's construction industry is facing a significant labour shortage in 2024, a challenge that poses risks to economic growth and infrastructure development. In July of 2024 the construction industry’s industrial capacity utilization (or how much of the actual construction industry’s capacity is deployed) was the lowest it has been at near all time lows at 82.7%.  Which, according to Stats Canada has not been seen since 2017, and is down from 2021’s 92.8%. This means there is currently a 10% gap in capacity. Furthermore, CAGR had been expected to be 4% between 2022 and 2026. We are now past this, and the gap is widening.

Several factors contribute to this shortage, creating a complex issue that demands immediate attention from policymakers, industry leaders, and educational institutions. Particularly, almost half of construction insiders have said that labour shortages, retention and recruitment have been important obstacles for review.

 Causes:

Some of the causes of the labour shortage are an aging workforce where a large portion of the construction workforce is nearing retirement age. The retirement of skilled workers is outpacing the entry of new workers into the industry, leading to a gap that is difficult to fill. BuildForce Canada states that over 20% of Canadian construction workers are poised to retire in 8 years.

Another issue is the high demand for construction projects across the country. The ongoing housing projects and major infrastructure projects across the country have increased the demand for construction workers. This surge in demand has not been matched by a corresponding increase in the supply of labor. Canada currently has over 12,000 Job are currently available for workers to fill according to Canada’s government supported Job Bank. These Jobs could be filled by local or international workers.

 Impacts of the Labour Shortage

 As a result of the project delays and increased costs where the shortage of workers leads to delays in project timelines and higher labor costs as employers compete to attract skilled workers. These delays and cost overruns can affect the overall economy, as critical infrastructure projects may take longer to complete.

As a result of these shortages and over runs there may be cases where inexperienced workers might not have the same level of expertise, potentially leading to construction defects and potentially make it harder to develop in the long run.

With all of that said, the construction industry is a significant driver of economic growth. A labor shortage in this sector can slow down economic development, as critical projects are delayed or scaled back due to a lack of manpower. Ontario Immigrant Nominee Program (OINP) has increased the number of eligible the Employer Job Offer: In-Demand Skills Streams by 35 occupations with many of them in trades and construction related sectors.

 Potential Solutions

We do have some options to improve the situation by enhancing training and education that align with industry needs can make a crucial part of the market grow at a very manageable rate. Partnerships between educational institutions and construction companies can ensure that the skills being taught are relevant and up-to-date. We can also develop opportunities for schools to develop as high skilled labour becomes an important in demand sector.

We can also work to promote the construction industry as a viable and attractive career path for young people both domestically and internationally. By highlighting the potential for stable employment, good wages, and career advancement Canada can help draw more young workers into the field. This is a major driver for developing a highly skilled workforce to keep up with infrastructure projects.

In line with this we can start adjusting immigration policies to attract skilled construction workers from abroad can help mitigate the shortage. Streamlined processes for recognizing foreign credentials and integrating immigrants into the workforce can also play a significant role.  We can also train skilled workers as international students, as many colleges in Canada offer degrees that are in line with PGWP eligibility and could be a highly desired pathway to permanent residence in Canada. 

Conclusion

The labor shortage in Canada's construction industry in 2024 is a pressing issue that requires a multi-faceted approach. By investing in training, attracting new talent, adjusting immigration policies, and leveraging technology, Canada can address this challenge and ensure the continued growth and development of its construction sector. IF you are a skilled worker and are looking to see if you are eligible to live and work in Canada set up an initial consultation with us to see how we can help you come to Canada today!