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How Canada’s Construction Industry Can Meet Its Next Big Challenge

Buildforce CanadaExperts have been warning us about it for years. Now it’s here and the timing couldn’t be much worse. On the heels of tumbling oil and gas prices, a recession and wildfires in Alberta comes one of the biggest risks to Canada’s economy. The baby boom generation is about to retire on mass. For the construction industry, now adjusting to a period of slower growth, the seismic shift in demographics deserves equal attention. Industry can mitigate the impending wave of retirements, but only if it starts planning now.

If there’s anything the construction industry has learned from the previous recessions, it’s the danger of not planning ahead. During the ‘80s and ‘90s, industry took its foot off the gas and eased up on recruitment and worker training. When the economy improved and major projects ramped up, it was caught short without enough skilled workers. That was a hard lesson. This time, the construction industry can’t afford not to prepare for what’s coming.

The greying of Canada’s workforce will have a profound impact on the construction and maintenance industry. This decade, up to 250,000 construction workers are expected to retire. That’s about one-quarter of the skilled workforce. It’s a huge loss of skill and experience that’s compounded by yet another worrisome trend: a drop in the birth rate has shrunk the supply of younger workers. This demographic one-two punch requires industry to plan far beyond the current economic downturn. The reality is that even in a period of slower growth, steady recruitment, hiring and training is a must to build a long-term sustainable workforce. With so many new workers required to replace retirees, the potential risk of a gaping hole in the skilled workforce is too big to ignore.

Our rapidly aging workforce and low commodity prices are the reoccurring trends that shape BuildForce Canada’s latest labour market forecast. The 2017-2026 Construction and Maintenance Looking Forward forecast shows volatile global markets will continue to slow construction job growth. While most Canadian provinces are recruiting for major projects, including transit expansion and commercial and industrial building into 2019, the rate of hiring is now more moderate. New home building is flat or declining from recent peak activity levels in most provinces, while renovation work rises in many regions. Despite shifting timelines for major resource projects, Canada’s construction workforce is expected to hold its own, with national construction employment staying close to current levels by the end of the forecast period. A snap shot of construction in each province looks this way:

In B.C., major projects from proposed transportation to LNG projects are ramping up, bolstering the province’s construction workforce by 24 percent, or almost 17,000 workers over the next five years. Over 22 percent of B.C.’s skilled workforce is retiring this decade. It will need to hire another 40,000 workers to replace them. In Alberta, construction will lose more jobs, but at a slower rate over the coming year as large projects wind down. A sustained recovery across all sectors isn’t expected until about 2024. At the same time, Alberta will need to attract 36,000 workers to counter the retirement of 18 percent of its skilled workforce. In Manitoba, new hydro, highway, bridge and mining projects drive construction employment to a new record high this year. To keep pace with major projects and retirements, Manitoba will need to hire over 9,000 new workers this decade. In Saskatchewan, residential building declines while non-residential construction, including pipeline, power and resource development projects, sustain employment at high levels into 2019. Up to 17 percent of that province’s workforce is retiring this decade, and that means over 9,000 workers are needed to take their place.

New housing and major infrastructure projects in Ontario are driving construction job growth, especially in the Greater Toronto Area and southwestern Ontario. That’s where recruiters are focusing on the province’s biggest engineering projects including transit and nuclear refurbishment. With about 20 percent of Ontario’s construction workforce retiring this decade, as many as 86,000 new workers are needed to counter the exodus. In Quebec, current and proposed utility, pipeline, highway and bridge projects are expected to create new jobs, with an increase of about 10 percent over the next 10 years.

To the east, anticipated investments in energy, utilities and manufacturing will boost engineering related employment in New Brunswick from 2020 to 2025. It’s the only Atlantic province where housing starts are expected to rise over the short term. Major projects are winding down in Newfoundland and Labrador as total construction employment returns to levels of the early 2000s. In Nova Scotia, a major transmission project, highway and bridgework drive steady employment growth over the next decade. With 24 percent of its workforce retiring, Nova Scotia may need to recruit workers from outside the province even during a slower growth period.

For the construction industry in every region of Canada, the latest labour market forecast serves as a warning of potential risk. Industry can’t afford to ease up on hiring and training. Building a skilled workforce is a necessity, even in a slow economy and especially when a quarter of a million workers are about to take their leave.

Article submitted by Rosemary Sparks, Executive Director of BuildForce Canada

BuildForce Canada has gained a global reputation as the leading authority in construction labour market forecasting. Each year it releases a 10-year forecast to help industry in every province better plan and manage its workforce requirements.