“The opportunities for young people in the construction sector will be enormous”
The construction industry always had an immense impact on Canada’s economy. This sector accounts for 14% of the country’s Gross Domestic Product. More than one million Canadians work in construction. In addition, one construction job has the potential to create seven spin-off jobs in other sectors. Altogether, construction workers install, repair and renovate more than $150 billion of infrastructure every year. Looking at all these numbers, we can confidently affirm that construction is one of Canada’s largest private-sector industries. However, even this industry has seen its own struggles. With baby boomers reaching retirement age, there is an increasing lack of skilled workers. Recently, we have seen several workers on strike, which is putting even more pressure on the system. We asked Bill Ferreira, executive director with BuildForce Canada, about the outlook of the construction industry for the next years.
Milénio Stadium: What have been the main labour force challenges faced by the construction industry?
Bill Ferreira: The key challenge the industry has faced has been that employment in the construction sector has been growing faster than the labour force, which has produced very tight labour markets in most provinces. The recovery from Covid has been strong. That, along with a low interest rate environment that has contributed to above average housing starts, has drawn down the number of available workers faster than the industry can add them. The industry’s unemployment rate reached a record low of 2.7% in July as a result. At levels this low, employers are finding it increasingly difficult to find the skilled workers they need, when they need them. While labour markets were tight prior to the pandemic in some provinces, the increase in residential construction in the post-pandemic period has contributed to tighter labour markets now in most provinces.
MS: Canada is in the throes of a serious general labour shortage and we tend to blame it on the pandemic. Do you agree or are there other, maybe even more significant factors behind this event?
BF: There are a number of factors coming together all at the same time. The first is the higher-than-normal demand for construction services in most provinces. This is a function not only of the demand for new housing that I referenced above, but also demand created by public-sector infrastructure-stimulus programs designed to reboot economic growth quickly as the pandemic waned. And that’s saying nothing of demand created by regular industry growth. The second is the fact that the last of the baby boom generation turned 55 in 2020. Not surprisingly, many of these older workers have been slow to return to the industry, have decided to retire entirely, or are looking for employment outside the industry. While the industry has been successful at recruiting a large number of new workers over the past 12 months, the decline in the number of older workers has contributed to much tighter labour market conditions than prior to the onset of Covid.
MS: We recently have seen several strikes, with tens of thousands of workers off the job. What are the most frequent claims behind the strikes? Is the industry going to be able to meet these workers’ needs?
BF: I can’t really comment on labour negotiations. Most of the interruptions have been short-lived with unions and employers coming together cooperatively to negotiate settlement agreements that both sides endorsed.
MS: What is the workforce outlook for the next 5 to 10 years?
BF: Unfortunately, with Canada’s changing demographics, many of the pressures we see today are unlikely to dissipate in the immediate future. People aged 55 to 64 make up 20% of Canada’s population. Individuals under 15 years of age make up just 16% of the population. This gap means a greater number of individuals will retire from the general labour force over the next 15 years than there are young people to replace them. With construction demands unlikely to decline significantly over the next 10 years, the opportunities for young people in the construction sector will be enormous. Our latest outlook forecasts the industry may be short as many as 29,000 workers by 2027, based on currently known demands. However, to replace retiring workers and to keep pace with anticipated construction demands, the industry will need to hire 172,000 new workers between 2022 and 2027. With fewer young people available to backfill for older workers expected to retire, the competition for younger workers will be extremely intense as all sectors of the economy struggle to meet the challenge the country’s changing demographics is placing on the economy of Canada.
MS: Focusing on a particular aspect, as you mentioned recently, BuildForce has been predicting a massive wave of workers reaching the retirement point in their careers. Who is going to backfill for the gap they are creating?
BF: Backfilling will require a two-fold strategy. The industry will need to increase its domestic training, with a particular focus on the recruitment of workers from groups that have been historically under-represented in the construction labour force. This means employers will need to pay particular attention to the recruitment of women, individuals from the Black, Indigenous and People of Colour (BIPOC) communities, as well as newcomers to the country and refugees. However, with the growing gap between retirements and younger workers, immigration will also be critical to help supplement domestic recruitment efforts. Canada currently admits few skilled trade workers annually, most certainly not in the numbers sufficient to meet current and anticipated future needs. To ensure that the construction industry continues to attract its share of newcomers to Canada, reforms to the selection process will be needed. Combined, these two strategies should help the construction industry augment its labour force to ensure it remains adequate to the needs of the country.
MS: Let’s talk about the younger generations. How much does this sector need them and what are some good reasons they should be open to work in this field?
BF: As already mentioned, the construction sector will need to increase its recruitment of younger workers beyond present levels. With roughly 20% of the present-day construction workforce expected to retire over the next 10 years, the opportunities for young people in the sector are significant. And it goes far beyond what most students would typically associate as construction work. While the industry will most certainly need increased numbers of young people in Red Seal trades such as plumbers, carpenters, and construction electricians, it will also need many other individuals with expertise in digital technologies to help drive project planning, environmental management, project estimating, project management, site management and administration. Furthermore, as building technologies change through the use of greater automation, individuals will find many new career opportunities in the management and maintenance of these new automated tools.
In addition to being a very well-paid industry, the sector offers benefits that few other industries can. Entrepreneurship is one. Many people who own successful construction businesses launched their careers by working on job sites. A sense of accomplishment is another. Few other industries can offer young people the job satisfaction that comes from having contributed to the construction of a bridge, an airport, a dam, a power station, or the roads on which we all drive daily, and which endure for generations.
MS: When we speak of new generations, we speak of new work models. The pandemic changed the work dynamics for lots of companies. What happened in the construction industry during COVID? Do you see any changes that might be permanente?
BF: Other than in the initial phases of the pandemic, much of the construction industry across Canada was little impacted by the mandatory closures. With the rapid implementation of revised and what is likely to be permanent new health and safety protocols, the industry was able to proceed with the construction of infrastructure, housing and important public institutional buildings with very few worksite outbreaks. Worker training also adapted, with many training organizations looking at new ways to deliver online learning. Many of these organizations are now exploring the greater use of virtual reality tools to supplement traditional in-class instruction. In short, while many of these changes were already coming to the industry, the pandemic accelerated the pace of their introduction.
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