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Construction’s Dilemma

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It’s a high-stakes, cause-and-effect situation. It is no longer possible, likely or inevitable. It is serious. It is real. And it is happening now.

Despite plenty of residential, industrial, oilfield and high-rise commercial investment capital, Calgary builders, developers, and contractors confront an urgent dilemma: Lots of work, and not enough workers.

Construction insiders agree that money (investment) is not the problem. “Investment in residential construction has been on the rise since 2020,” notes the upbeat Bill Ferreira, executive director of BuildForce Canada, providing reliable labour market information, tools and resources for the construction  industry.

“In part, it is due to the low-interest-rate environment. Between 2020 to 2021, investment increased by 16 percent, and then a further 13 percent between 2021 and 2022. Non residential investment increased by 19 percent between 2020 and 2021, and a further five percent between 2021 and 2022.”

He cites the most recent BuildForce 2023–2032 Construction and Maintenance Looking Forward report, showing that Alberta housing starts increased from 24,023 to 31,935 between 2020 and 2021, and up to 36,544 in 2022. Housing under construction increased from 22,982 in 2020 to 28,503 in 2021, and then up to 35,537 in 2022.

At the same time, industry completions were also increasing, rising from 25,734 in 2020, to 26,408 in 2021 and 29,837 in 2022.

The stats and trends highlight construction’s dilemma: it is not a lack of work or a lack of capital.

For several years, Calgary’s construction sector shrugged-off the storm clouds and insider warnings about a looming trades crunch. Now that it is here, it’s up to Calgary construction sector to deal with it!

Being I told you so’s is not what the Building Trades of Alberta (BTA)—which promotes the interests of the 18 Alberta local residential, commercial and industrial construction trade unions—wanted or intended. Regardless, BTA’s cautions have now taken-on new meaning, and getting overdue attention.

“The current employment situation is increasing in Alberta, and it didn’t just happen overnight,” says Terry Parker, BTA’s executive director. “Pre-pandemic, since 2016, the work situation had already started to slow down. And during the pandemic, major projects slowed down substantially.

“The most impacted trades in the commercial and residential sector were carpenters, electricians, cement masons, sheet metal workers and others.”

Parker urges action and doing whatever it takes. “The BTA forecasts a robust construction industry throughout Alberta over the next decade. This is partially due to several large green field projects that will require tens of thousands of construction trades.

“But reality shows that a trade shortage will be a serious problem across North America over the next decade, even if only half of the scheduled projects get off the ground.”

BuildForce stats underscore the construction sector’s key challenge directly tied to demographics. Despite Alberta benefiting from a younger population, the share of workers 50-64 is a low 18 percent. And experts warn that competition for skilled workers will intensify, as all sectors of the economy will be competing to attract younger workers.

There is growing industry caution that Alberta must be proactive to ensure enough young people available to replace the older workers expected to retire over the next 15 or so years.

BTA’s Terry Parker points out some reasons for the trades crunch. “People that left the trades due to lack of work during the pandemic, and also the lack of work after several mega project completions in Alberta.

“Of course, baby boomer retirements are a huge factor. And the shortage of new apprentices coming into the trades, during the past 10 years or so.”

According to Jason Gillespie, president of Calgary’s Pathfinder Group, specifically focused on construction and architecture industry recruitment, the urgency is about lots of jobs but not enough people.

“The current job vacancy rate in the construction sector is  around 7.2 per cent, higher than it was this time last year. And age is very much a factor. Many skilled trades are retiring from the industry and there are gaps not being filled. The problem is the availability of skilled professionals for construction.

“In the 17 years I’ve been doing this, we haven’t seen this many people leaving the industry altogether, for whatever reasons. Some just wanted a change of pace, maybe get into something more sustainable, something that fits their lifestyle better or they just wanted a change.

“There are lots of reasons why people have left the industry,” he said. “But the long-term impact is that builders and developers may not be able to meet their targets.”

Bill Ferreira emphasizes a double-barreled trades crunch problem. “First, the construction industry must stay focused on increasing domestic recruitment, particularly with under-represented in the construction sector, such as women working onsite and Indigenous people.

“Women in onsite trades account for only 7.5 percent of Alberta’s construction labour force, with a slightly higher share of women working in the residential construction sector. Indigenous workers accounted for 6.7 percent of Alberta’s construction workforce, higher than the overall share of Indigenous workers in the broader labour force.”

Ferreira also urges for more construction workers from abroad, adding the undisputed fact that Canada’s population is aging and, over the next decade, newcomers will make up an increasing share of the overall labour force.

“Newcomers are essential,” he says. “Currently, they account for 26 percent of the total labour force, although in the construction sector, they account for only 19 percent. Newcomers are crucial to supplement construction’s domestic recruitment efforts.”

The capital investment is ready. The projects and the work are ready. And the BTA’s Terry Parker is blunt. “We must prepare now, for the construction industry’s labour shortage. Waiting for the industry to correct itself during projects, could be disastrous for the economy.”

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