By Robin Brunet
Purely in terms of data, Canada’s construction industry encountered its fair share of headwinds in 2023, as a Research and Markets report released in August illustrates.
According to the report, the industry overall will post a 2023 contraction of 5.2 percent, with the decline “primarily driven by reduced residential construction activity due to tightening monetary policies and a weaker economic outlook.”
And yet, the disappointing numbers don’t correlate with reports from contracting and trades communities who say they are busier than ever. “Our industry employs some 1.6 million people from coast to coast, and in 2023 they were kept busy in both the public and private sectors,” says Mary Van Buren, president of the Canadian Construction Association. “In fact, the amount of work required is such that we have an estimated shortfall of 59,000 people.”
Sean Strickland, executive director of Canada’s Building Trades Union, agrees. “Business is brisk no matter where you look, from electric vehicle plants in Quebec and hydrogen projects in Nova Scotia and Newfoundland to carbon sequestering projects in Alberta and new nuclear plants in Ontario.
“Plus, it’s important to note how massive many of these projects are, with Alberta being a good case in point. Next year in Edmonton, Dow Chemical will begin an $11.5 billion facelift and expansion of its chemical plant to make it the world’s first ethylene cracker that produces net-zero greenhouse emissions.”
Strickland adds, “Despite the residential market being down, the demand for new housing is through the roof, driven by 500,000 new Canadians coming to our country yearly.”
A lot of optimism comes from the changing face of Canada’s industrial portfolio. One example is the country’s data centre growth, driven by increasing demand for cloud computing and IoT favourable climatic conditions. The consultancy Linesight notes that over US$7.4 billion-worth of data center projects are in the pipeline, with a significant concentration in Ontario and Quebec.
According to Linesight, the federal government’s ambition to establish Canada as a clean industrial hub—hence the investments in electric vehicle battery manufacturing and carbon sequestering, as well as gigafactories in Southern Ontario—contributed to 2023’s one bright spot: an estimated growth rate of 15.5 percent for the industrial sector overall.
Of course, traditional projects are key to the industrial sector’s success. “Just to cite a few examples, we’ve got refits of nuclear plants in Darlington and Pickering, as well as big hospital projects,” says Ian Cunningham, president of the Council of Ontario Construction Associations (COCA).
The multi-year aspect of these projects explains why, despite reports of contractions, those employed in the construction sector are busier than ever, and the new South Niagara Hospital in Niagara Falls is just one case in point—after ten years of planning, construction of the $3.6 billion facility got underway in July and won’t be completed until 2028.
But a booming industrial sector with promises of more to come exacerbates the persistent problem of labour shortages. “Plus, even if the people with decades of experience who are now retiring are replaced, it’ll take a long time for the new journeymen to acquire the same level of efficiency and problem-solving capabilities that are so essential to our industry’s success,” Cunningham says.
However, strictly in terms of recruiting newcomers, Strickland is optimistic. “It’s in our DNA to attract them, and we continue to endorse initiatives aimed at women and First Nations,” he says. In fact, recent data from Statistics Canada’s Labour Force Survey suggests that, thanks to a combination of industry and government programs, the number of women in construction has increased significantly, outpacing the growth in the male workforce in 2023.
“I think also what’s increasingly being constructed—facilities and infrastructure contributing to decarbonisation and other green objectives—could be a strong lure for young people,” Strickland adds.
Van Buren points out that with approximately 13 percent of the construction workforce expected to retire between 2022 and 2027, her association is advocating for changes to the Canadian immigration system, in order to facilitate the entry of skilled immigrants and temporary foreign workers interested in working in construction.
Also, the CCA has partnered with the Canadian Apprenticeship Forum, the Aboriginal Apprenticeship Board, BuildForce Canada, and other organizations to advance Ottawa’s Canadian Apprenticeship Service, which provides up to $20,000 per fiscal year in financial incentives to small and medium-sized employers for the hiring and training of first-year apprentices in 39 Red Seal trades.
“We also want to see a federal long-term infrastructure plan developed, led by an assessment mechanism to determine what projects Canada really needs,” Van Buren adds. “This would enable us to avoid the boom-and-bust cycles of changing governments and line up the type of talent we need.”
Strickland is especially gung-ho for one labour-related initiative—Ottawa’s Investment Tax Credits, which will take effect in January. “These are fantastic for our union contractors and will compel non-union businesses to pay their workers union wages and retain apprentices,” he says.
Despite headwinds now, the Research and Markets report notes that the construction industry “is expected to see growth between 2025 and 2027, with an annual average rate of 2.7 percent, supported by advancements in the industrial, energy, and transportation sectors.”
Finally, one factor that will support growth is worth noting: material prices in 2023 retreated from the highs of the pandemic years, with lumber prices stable and copper, steel rebar, and other material prices dropping, too. Even the price of cement, which escalated due to stricter environmental regulations, is rising at a slower pace. ■
