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The Construction labour shortage is a major issue for our communities and the Canadian economy. In this discussion, our CIBC experts are joined by developer Steve Diamond, CEO of Toronto based DiamondCorp, for a discussion on the causes behind and solutions to the labour shortage.

Panel Discussions

Elsa: Thanks so much, everyone, for being here today. It&#8217;s going to be a great discussion so let&#8217;s get into it. Benny, I want to start with you. Can you give us a thirty second overview of your research on Canada&#8217;s construction labour shortage?
Benny: Yes, of course. We know, if you pay attention, that the supply issues are the main factor impacting the housing market in Canada. And the major factor here is the shortage of construction labour and clearly skilled trades. Canada is aging. The construction labour market is aging even faster. The average retirement age is 60. We estimate that over the next ten years, no less than 300,000 people will retire from the industry. And what&#8217;s coming to replace them? Not much. If you look at the number of new immigrants that are in construction, only 2% of them are in construction, going down only 2% of them are in construction going down. The opposite of what we should be seeing. So this is a major force impacting the housing market in general.
Elsa: And Calvin, how does this align with what you&#8217;re seeing with our clients and how it&#8217;s impacting their sites?
Calvin: I think Elsa, as much as as Benny describes, you&#8217;ve got a shortage of people, you&#8217;ve got a shortage of labour, you&#8217;ve got increased costs, you&#8217;ve got slower production, there&#8217;s unequal bargaining positions. You know, we&#8217;ve seen this for some years. When we look at affordability, when we look at the desire to produce houses more quickly, this is one of the absolutely critical issues.
Elsa: So, Steve, I want to hear your perspective on this as one of our clients.
Steve: So when you&#8217;re on the ground every day, what are you seeing?
Elsa: Is this just a numbers issue or is it impacting you in real time?
Steve: No, it&#8217;s clearly impacting us in real time. And in fact, I would suggest, that in fact, not having an adequate supply of labour could be the most significant issue with respect to the supply of affordable housing over the next decade. And I&#8217;d like to just give an example of the way it works in reality on the ground. If on day one, you&#8217;re supposed to have ten drywallers come to your site and four show up, and then on Friday you&#8217;re supposed to have your bricklayers there because their drywall is completed, well the bricklayers say they can&#8217;t do their work, so they&#8217;re not coming back. And then we haven’t completed the drywall work and we can&#8217;t produce the housing at the cost that we thought from the very beginning, which is a real crisis in terms of being able to provide the housing that we want to do in this province.
Elsa: So, let&#8217;s pretend you did get the adequate amount of labour that you needed, what would that mean to you and your projects finishing both on time, on budget?
Steve: Well, not only would it mean that we could produce housing quicker, which means it would be more affordable, it would also mean that we would, in the industry, be able to provide more innovative solutions to our housing issues.
Elsa: Benny, I&#8217;ve heard you say before that, “Canada needs to wake up”. What is one action the government could take to fix this problem?
Benny: We can do a few things. First of all, we have to break the negative stigma associated with skilled trades. We need more people going there, including, by the way, women. That is starting to see some increase in the numbers in the industry. Immigration. We have to change the point system in a way that will bring more new immigrants into the industry. We need more workers coming from the immigration. Two percent is too low. It has to go higher. And then, we have to increase productivity in a way that will reduce the need for labour in the industry.
Elsa: Thank you so much, everyone. This was really insightful.

The Construction Labour Shortage – Panel Discussion

Benjamin Tal

Deputy Chief Economist

CIBC

Elsa Hannaford

Vice President, Real Estate Finance

CIBC Commercial Banking

Calvin Younger

Senior Vice-President

CIBC Commercial Banking