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Who Will Build the New Homes We Need?

8 May 2024

The government aims to build 3.87 million new homes by 2031 through its housing strategy, which focuses on increasing construction of both owner-occupied and rental housing construction. However, a major constraint to achieving this ambitious target is finding enough skilled workers. RBC estimates that Canada could need more than 500,000 additional construction workers to meet this demand.

The construction sector had a job vacancy rate of 5.1% in the third quarter of 2023, which is one of the highest rates across all Canadian industries. Compounding this challenge is the aging workforce in construction, with one in five workers either already at retirement age or reaching it within the next decade. This demographic trend alone accounts for the need to replace 330,000 workers.

Failure to take aggressive measures to attract more individuals to the construction sector and incentivize older workers to stay longer will hamper efforts to solve our housing and affordability crisis.

In the budget, $200.5 million was allocated for a summer jobs program in 2025-26, specifically targeting sectors with significant labor shortages, including housing construction. While this program may assist in providing laborers, it won’t address the shortage of skilled trades workers in the short-term.

Immigration could offer some assistance in addressing the shortage. Currently, skilled trades workers make up approximately two per cent of new immigrants to Canada. While steps have been taken to improve this intake, the points system we use in the immigration system still favors those with higher levels of education.

However, considering that we’re in competition with other countries like the US, UK, Italy, and France for construction workers, our immigration policies must go beyond simply making it easier to come to Canada.

The need for skilled workers is further compounded by the focus on greening Canada’s homes. To achieve net-zero emissions for buildings, BuildForce Canada estimates a shortfall of 57,000 workers to meet the net-zero target for housing by 2050. The conversion of existing housing units and the construction of new homes with heat pumps, as well as energy-efficiency retrofit projects aimed at reducing heat loss, is estimated to increase investment in the residential sector by approximately $81.5 billion (in constant 2012 dollars).

It will be a significant challenge for our governments to develop a framework to recruit more workers to the construction sector. We’ve seen some initial steps to solve this part of the housing affordability puzzle, but there is a long way to go.


Independent Opinion

The views and opinions expressed in this publication are solely and independently those of the author and do not necessarily reflect the views and opinions of any person or organization in any way affiliated with the author including, without limitation, any current or past employers of the author. While reasonable effort was taken to ensure the information and analysis in this publication is accurate, it has been prepared solely for general informational purposes. Any opinions, projections, or forward-looking statements expressed herein are solely those of the author. There are no warranties or representations being provided with respect to the accuracy and completeness of the content in this publication. Nothing in this publication should be construed as providing professional advice including investment advice on the matters discussed. The author does not assume any liability arising from any form of reliance on this publication. Readers are cautioned to always seek independent professional advice from a qualified professional before making any investment decisions.

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