Home Month and Year February 2024 Calgary Construction’s Labour Crunch

Calgary Construction’s Labour Crunch

Aging skilled trades and the stigma of blue collar

SHARE

Calgary’s commercial and residential construction has a problem. While there is lots of work, there are not enough carpenters, framers, drywallers, electricians, plumbers, roofers, cement masons, refrigeration and air conditioning mechanics, and tile setters.

Construction sector insiders are unanimous. Calgary construction is dealing with a labour crunch, which is delaying or holding up the pace and the volume of particularly Calgary multi-family buildings and detached new homes. Some say it is the consequence of a perfect storm of aging skilled trades retiring and waning interest from a new generation of trades, speedbumps and government obstacles and restrictions about skilled trade workers from abroad, the lure of salaries and careers in the tech sector and the lingering stigma of blue collar versus white collar jobs.

The stats and trends about the overall labour market, compared with the labour market in the construction sector underscores the problem.

According to Bill Ferreira, executive director of BuildForce Canada, the respected industry association which studies and forecasts long-term trends in the labour market, “The unemployment rate was marginally higher at the end of last year, than the year before. A similar year-over-year comparison for the construction sector shows unemployment edged up slightly from 3.6 per cent in 2022 to 4.5 per cent in 2023. That is still well below historical rates of unemployment for the sector, but indicative of an improvement in the labour supply.

Employment in the sector is higher by some 26,500 workers, so the rise in unemployment is related to the labour force growing again at a faster rate than overall employment. This has not been the case in the construction industry for the past several years, which helped drive down unemployment rates in most provinces across the country. The overall construction labour force peaked last August, at 1.7 million.”

He points out that, nationally, the residential sector has been more impacted than other construction sectors, due mostly to the impact of higher interest rates on consumer demand for new housing and renovation activities. There are regional variations to these trends, but in general, softer demand for housing projects has been the most dominant factor.

According to the stats, Alberta’s residential construction sector saw a contraction in 2023, due to fewer housing starts and lower levels of renovation investment, mainly due to lower demand for single-family homes and to a lesser degree, declining demand for renovation activity.

The numbers also show that the non-residential sector reported a slight increase in employment, driven by growth in both engineering and ICI demands. These trends were in line with similar trends across the country.

In the Calgary area, the available of labour and skilled trades impacts both residential and commercial construction, but particularly housing starts. “Labour supply is an essential input supporting industry’s ability to initiate and complete housing projects,” notes Brian Hahn, CEO of the Building Industry and Land Development Association, Calgary Region (BILDCR).

“As indicated by CMHC’s housing starts and completions data, Calgary’s 2023 residential construction industry surpassed the record level achieved the year before. There was year-to-year CMHC housing starts data showing an 11.33 per cent increase in housing starts from the record numbers in 2022.”

But he underscores the urgent need for labour to maintain Calgary’s housing start momentum. “Labour supply plays an essential part in the industry’s ability to deliver housing starts and completions. Calgary is internationally recognized as one of the most attractive, and historically affordable, regions in the world to purchase a home, and that has certainly contributed to increased demand for labour.

“The residential construction labour situation in Calgary has changed over the past five – six years. Factors such as economic conditions, population growth, government policies, market trends and technological advances have influenced the demand for construction labour and the skills required. These changes highlight the need for adaptive strategies in workforce planning within the industry,” Hahn adds.

While Calgary’s construction industry professionals agree about the residential and commercial work which needs to be done, they are realistic about the apprenticeship training which is the only to ease the crunch.

SAIT knows the pulse of industry and has been at the valuable and innovative forefront of training construction trades and graduating skilled trades and apprentices. SAIT also tracks the flux in construction employment and Calgary’s labour crunch. “From 2017 to 2021 we saw declining demand for apprenticeship training,” explains Jim Szautner, associate vice president Academic and dean of Apprenticeship at SAIT. “The industry was not hiring apprentices, which resulted in the supply of talent being restricted. The apprentices of 2017-2021 would be the journeyperson of today. Because there was a lack of hiring during these years there is a lack of journeyperson talent today.

“Aging demographics is another factor. It has been long documented that the skilled trades work force was an aging workforce and eventually these workers would exit the trades as they enter retirement. We are now experiencing this, and the talent pipeline was not sufficiently stocked to keep up.”

The situation seems positive, with SAIT experiencing a significant demand for programs in the skilled trades. He highlights increased demand in support of the construction sector, such as electricians, plumbers, carpenters, cabinetmakers, Sheetmetal workers, roofers, steamfitters and gasfitters and more.

“SAIT offers over 26 apprenticeship programs in the skilled trades and also a number of dual credit, pre-employment, certificate and diploma programs to create pathways into the trades,” he says. “Our pre-employment, certificate and diploma programs are designed to provide student with trade specific education and experience ensuring they are work ready graduates to enter into the skilled trade of their choice.”

BILDCR’s Brian Hahn emphasizes the urgency of training and attracting more trades for Calgary’s construction sector. “Ongoing collaboration among educational institutions, industry stakeholders and government entities is essential for developing tailored training programs that align with the evolving needs of the trades sector.

Attracting younger individuals and newcomers to Alberta trades is imperative for the sustained growth of Calgary’s residential building growth.

He underscores that industry, academic and government cooperation is essential to solve the construction labour problem.

“For individuals new to Alberta, some companies offer training programs in multiple languages to facilitate a smoother onboarding process. Additionally, showcasing modern technologies, sustainable practices and success stories can dispel stereotypes, appropriately showcasing careers in the trades as appealing,” Hahn adds. “A number of BILDCR members provide diverse apprenticeships, mentorship initiatives and educational partnerships, aiming to bridge the gap between classroom learning and on-site experiences.”

Construction industry insiders echo the current Calgary labour crunch problem. BuildForce’s Bill Ferreira is positive and suggests some solutions. “Long term, the industry requires better support from federal and provincial immigration programs to ensure that the industry can better access skilled trade workers from abroad to support its ongoing domestic labour force recruitment and development efforts.

“Addressing home affordability, electrifying the economy, modernizing and expanding Canada’s trade-enabling infrastructure will require an expansion of the construction industry workforce. Ongoing attention to recruitment domestically, addressing outdated stereotypes about the industry and improving workforce recruitment diversification will all help improve the situation,” he says.

“But with fewer youth available to replace retiring workers over the next 15 years, enhance skilled trades immigration will be critical to help the sector remain competitive.”

LEAVE A REPLY