2023 promises large infrastructure projects and private investment, but construction industry leaders call for changes to immigration policy to fill 81,000 jobs
By Robin Brunet
In some ways, 2023 for the Canadian construction sector is shaping up to be a repeat of 2022 in that it is experiencing an embarrassment of riches. The riches are a wide array of major projects that, for the main, commenced last year. The embarrassment—or challenge—is the ongoing question of whether there will be enough humanpower to handle all the work.
Some circumstances make the construction landscape different from 2022. For example, in some cases skyrocketing materials prices are starting to stabilize, and the hope is they will begin to move downward as the year progresses. Also, rampant inflation is, unlike last year, beginning to take its toll in the form of a cooling off of the once white-hot residential market.
Immigration Reform Needed
But above everything else, labour is the dominant concern of the industry’s advocacy leaders. Driving them is Ottawa’s plan to repair, maintain, and retrofit infrastructure while also building for future climate resilience at a time when the construction industry is struggling to fill over 81,000 jobs nationwide.
While last year’s announcement from the federal government that Canada would welcome up to 500,000 new immigrants annually by 2025 is helpful, it’s only a start, as far as the Canadian Construction Association (CCA) is concerned. It is calling for Ottawa to modernize its immigration policy and point system to better recognize labourers and those with relevant skills; work with the provinces to ensure skills matching is properly funded and supported; and update the Temporary Foreign Worker program.
CCA president Mary Van Buren points out that older workers reaching retirement will contribute to the problem “if steps aren’t taken to rebuild Canada’s workforce now.” She adds, “The current federal immigration point system does not favour the trades: many newcomers cannot even find work in their field of expertise. We need to put their skills and experience to work and expedite the recognition of their training and credentials.”
Major Projects in Canada
Ian Cunningham, president, Council of Ontario Construction Associations (COCA), says of home-grown recruits, “It will be extremely difficult to train them quickly enough to meet capacity.” Therefore, Cunningham thinks the rollout of Ottawa’s infrastructure upgrades—as well as many other projects—may happen more slowly than desired.
Still, Ontario is a good example of immense projects underway that are proceeding smoothly, and Cunningham cites the Ontario Line and the Gordie Howe International Bridge as two of dozens of examples of major projects that dominated 2022 and will continue in 2023. The former is a 15.6-kilometre subway line that will make it faster and easier to travel within Toronto and beyond. The latter, which has been under construction since 2019, will connect Windsor to Detroit. The towers of the bridge were recently completed, and once the entire $5.7 billion structure is completed in 2024, it will be the longest cable-stayed bridge in North America at 0.53 miles. “The point is, every section of our province is busy with big projects,” Cunningham says.
The same holds true for other provinces. Sean Strickland, executive director, Canada’s Building Trades Union (CBTU), says, “We have two major electric car battery plants going into Ontario and one in Quebec. In Saskatchewan, there is a major potash project ramping up. In Alberta are a host of upcoming carbon sequestering projects, and in BC workers are occupied with lots of road building and a massive extension to the SkyTrain line.”
Construction in Western Canada
In fact, SkyTrain is undergoing two massive extensions, one being a 5.7 kilometer extension of the Millennium Line (with six underground stations) scheduled to open in 2026. The Surrey Langley SkyTrain project will extend the Expo Line 16 kilometers to Langley City.
The Alberta Strickland mentions stems from Emissions Reduction Alberta committing $40 million from the province’s Technology Innovation and Emissions Reduction fund to 11 projects worth $194 million. If successful, these projects could lead to over $20 billion in capital expenditures and create thousands of jobs.
As for Saskatchewan and potash, in November, workers at the Jansen potash mine completed the excavation and lining of the 1,000 meter deep shafts, the largest of their kind in the province. Owner BHP is seeking to accelerate the $5.7 billion project with the aim to start potash extraction in 2026.
Rebuilding Canada’s Workforce
Strickland is united with Van Buren and Cunningham in calling for a rebuilding of Canada’s workforce. “We currently bring in 100,000 new apprentices yearly, but we need to do better. We also need to support apprentices by putting minimum requirements for them into work contracts.”
But Strickland is cautiously optimistic of the strides made so far. “In working on express entry immigration with Ottawa, we made headway with heavy equipment operators in 2022,” he says. “Also, BC has a best in class program that would help nurture a new generation of Canadian construction workers. It could and should be replicated in other provinces.”
Strickland is referring to BC Infrastructure Benefits (BCIB), a Crown corporation accountable for implementing the Community Benefits Agreement (CBA) on select public infrastructure projects. BCIB’s purpose includes mobilizing and growing a safe, diverse, and skilled workforce. It is the employer for all employees on CBA projects and ensures priority hiring is given to equally qualified local residents, Indigenous people, and other underrepresented groups (it is also responsible for training, capacity building, and worker support).
Despite all the concerns, construction association leaders are fairly optimistic that their industry can meet the needs of both government and private developers. “There have always been and always will be challenges in our industry,” Cunningham says. “But at the end of the day, we’re a can-do bunch of people. I’m always amazed at what can be done and what gets done.”
Spotlight on British Columbia
Ask anyone in B.C.’s construction sector how they’re doing in 2023, and the answer will likely be that they’re swamped with work—which bodes well for an industry that represents 9.7 percent of the province’s GDP and employs over 236,000 people.
But contractors are facing considerable challenges, according to the Fall 2022 BC Construction Association (BCCA) Industry Stat Pack.
The report shows that investment in the province’s industrial, commercial, and institutional construction sectors is down 10.9 percent since February 2020, while the non-residential building price index spiked 19.6 percent.
Rising prices have caused the construction industry to grow 10 percent in dollar value despite the decrease in demand. It has also experienced a massive 80 percent increase in the value of current projects compared to five years ago. But BCCA president Chris Atchison points out that this isn’t good news when paired with competition for talent causing wages to soar 26 percent since 2017.
“Yes, people are busy, but these figures are cause for concern,” he says.
Even more troubling to Atchison is the fact that unlike in other provinces, Victoria has failed to deliver on prompt payment legislation. “Without it, B.C.’s contractors will take on increased cost of debt, and some will risk bankruptcy as they wait 90-120 days to be paid,” he says.
Unsurprisingly, B.C.’s labour situation is a story unto itself. Despite an increase in the number of construction companies (now 26,262), the average company size has decreased 7 percent over the last three years. Plus, the number of tradespeople overall has dropped 5 percent over three years (equally troubling, women comprise 5.7 percent of tradespeople, but that number has been decreasing 8 percent year-over-year since 2017).
Acutely aware of the B.C. industry’s strengths and weaknesses, organizations such as the Vancouver Regional Construction Association (which is dedicated to connecting industry players and creating opportunities) continues to offer financial support to those currently enrolled in a construction-related field of study at a regional post-secondary institution, via the VRCA Bursary Program.
The VRCA also generates considerable media attention for the construction industry by hosting events and panel discussions, and last year its online panel discussion, “Fixed-Price Contracts in a Price-Volatile Market,” broke VRCA attendance records (key suggestions from the session included the warning to contractors and subcontractors that if there isn’t an escalation clause or if supplementary conditions are excessive, they may need to turn down the work).
Despite the challenges facing B.C.’s construction industry, a massive array of projects is scheduled for procurement start this year, including a host of hospitals (including those in Nanaimo, Kamloops, and Metro Vancouver). Infrastructure work underway includes two major extensions to the SkyTrain lines and the LNG Canada Terminal in Kitimat, which at $40 billion is the largest single private sector investment in Canadian history. The total estimated value of major construction projects currently underway in B.C. is $135.4 billion.
“Our industry is massive, essential, and struggling,” Atchison concludes. “So while 2023 is super busy, we will continue to advocate for better conditions for our members.” ■
