Canada is facing a significant labour challenge, with projections indicating that approximately 700,000 of the nation’s 4 million skilled tradespeople are set to retire by 2028 necessitating the need for more immigrants into the workforce.
Statistics Canada has highlighted this growing gap between the large number of unfilled positions and the shortage of qualified workers, which poses a significant risk to industries that rely on skilled trades.
According to Dennis Darby of the Canadian Manufacturers and Exporters, their position has consistently been, “We need more immigrants.”
This is because, given their sheer numbers, newcomers could be the key to replenishing Canada’s shrinking trade workforce. Industry associations have
urged changes to the immigration selection process to support this goal.
Earlier this year, BuildForce Canada, an industry association for Canada’s construction sector, called on the Trudeau government to address the shortfall
through immigration reform.
They stated, “Closing this gap will require the industry to hire from a variety of sources, including the hundreds of thousands of new permanent and non-permanent residents expected to be admitted to Canada in the coming years. The challenge is that the current system does not support this objective.”
Canada’s Ageing Skilled Trades Workforce
In Ontario, at least one-third of tradespeople and apprentices are aged 55 or older. As these older workers retire, they are not being replaced by younger individuals with equivalent skills to take on their roles.
According to Bill Ferreira, executive director of BuildForce Canada, “We’ve been seeing this creep up as the big issue since the mid-2010s. All you have to do is look at the latest census data and population data and you’ll see that we have a challenge that is related to demographics.”
The manufacturing sector unable to meet demand due to a manpower shortage
The manufacturing sector, for example, generated $213 billion in economic activity and 1.6 million direct jobs in 2023.
Unfortunately, Darby says, “As a result of labour shortages, over 60% of manufacturers surveyed said they’ve turned down or lost contracts. This means
they just can’t meet the production.”
He also adds, “…43% have postponed or cancelled capital investments. That’s how important labour is in manufacturing…Canada isn’t doing enough to close the gap, stating, “I think we’re going to have chronic labour shortages.”
In illustrating the labour shortage situation, Darby said, “I talked to one business owner who was begging this guy to stay. ‘Whatever you want to work—three days a week, fine. You want to work between 10 and 3? OK, whatever you want.’”
Economists at the Canadian Manufacturers & Exporters (CME) estimated that the skills shortage in this sector cost the Canadian economy approximately $13 billion in 2022 due to lost contracts and delayed investments.
Manpower gaps in the construction sector
The construction sector is also affected. Although a $165-billion industry contributes 8% to Canada’s GDP, a CIBC report from last year identified 80,000 job vacancies nationwide, with half of these unfilled positions requiring skilled tradespeople.
The report explains, “It is hardly a secret that the industry needs more workers, and fast. Ask any developer about supply issues and the availability of labour
usually tops the list.” It further notes, “It should be noted that in the short term, at least, a record-high 650,000 people are working in Canada’s construction industry and job vacancies have returned to pre-COVID norms, easing some concerns over labour shortages
(for now).”
The pressing need for skilled construction workers is caused by their scarcity, which is creating significant challenges for employers and delaying the
construction of essential infrastructure. As a result, this shortage is driving up costs and further exacerbating the housing crisis, as public service warnings have alerted the Trudeau government.
Moreover, the Canadian Mortgage and Housing Corporation estimates that Canada needs to increase its housing supply by approximately 3.5 million units by 2030 to restore affordability to 2004 levels.
In other words, the skills shortage is already impacting Canada, hindering economic growth and driving inflation. Although governments have recently
begun implementing programmes to address this issue, experts worry that these efforts may be too little and too late.
