Construction workers shortage stands in the way of housing boost: experts

The federal budget tabled Tuesday acknowledged skilled labour shortages contribute to the "entrenched structural barriers" holding back new housing supply.

Solving a longstanding construction worker shortage will be key to boosting housing supply, experts say, as Canada’s national housing agency continues to forecast housing start levels that fall short of growing demand.

The growing construction labour shortage was cited by the Canada Mortgage and Housing Corp. as one of three factors contributing to longer construction times in a housing supply report last month.

Along with larger project sizes and increasing costs, the agency said workers are retiring faster than they’re being replaced. This challenge was worsened by the pandemic, when some construction workers changed careers or retired prematurely rather than returning to the industry as the economy reopened.

“It’s been the monster in the woods for a long time. We’ve known this is coming,” said Jordan Thomson, senior manager of infrastructure advisory at KPMG in Canada.

“However, it’s kind of reached a head now, in that there is a lot of work combined with just the reduction of the overall labour force.”

Thomson said the industry is facing the dual challenges of replacing workers as they retire while trying to grow the sector to address Canada’s rising need for homes.

Canadian Home Builders’ Association CEO Kevin Lee estimated 22 per cent of residential construction workers are set to retire over the next decade.

While the labour shortage is an ongoing challenge, he said its effects have been somewhat muted over the past year as high borrowing costs have led to a slowdown in demand from potential homebuyers in many markets.