There’s a labour shortage in the construction industry, but it’s not for lack of people wanting to work. The number of new workers may even have increased over the past few years, thanks in part to COVID. While other industries like hospitality suffered during the pandemic, construction was an essential service; it slowed for a moment to implement health safety guidelines and then kept on building.
Even so, companies across the South Island say new job postings are now staying active indefinitely, and where a builder used to receive six resumes a week, now they might see two or three in a month. Contractors bid outrageously high sums for small jobs because they just don’t have the capacity.
Langford-based builder Verity Construction’s CEO has been supplementing existing crews with out-of-town workers.
The problem is there’s nowhere for them to live.
“There’s just no availability, whether to rent or buy. Affordability is a factor too, but availability is the biggest factor,” CEO Chad Bryden said. There just aren’t available homes for rent or purchase, no matter the price.
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Call it a bottleneck, a trap, or a vicious cycle, you can’t build new housing without a labour force, and workers can’t come if they have nowhere to live.
Gordon ‘n’ Gordon, another Langford construction company, isn’t typically a developer; they focus more on specialized contracted trades like steel stud framing and drywall installation. Though they do have a couple of proposed developments moving through Langford’s approval process. At a recent council meeting, their proposal for a six-storey residential building was on the agenda. The presentation included a short note saying that part of the building would be reserved to rent out to employees at under-market rates.
Do new workers want to be builders?
Construction and trades have historically been attractive industries for workers. Work is reliable, the pay is generally good, and there’s enough variety in the work—grunt labour on a home renovation all the way to specialized Red Seal trades on major infrastructure—that it can suit anyone. And during the pandemic, though there was a slowdown in new building permits at the beginning, the industry trucked along.
Camosun College’s waitlist of carpentry students grew. Want to sign up to learn the trade? You’ll be waiting for up to two years to get a seat in class.
That has meant not enough people have been brought in to replace the retiring workforce, at a time of record demand for construction.
“It’s not a matter of ‘or,’ it’s ‘and’—our workforce is retiring and we have a high level of work,” said Rory Kulmala, CEO of the Vancouver Island Construction Association. “So even if we add people, we’re doing a record volume of work across Canada. There’s something like 1.5% housing vacancy in Greater Victoria, and at any given time we have 4,000 to 4,500 units in the hopper being built. There are more cranes now than ever on the skyline.”
More workers than ever are needed to work on and beneath those cranes.
In 2016, for the first time, the Capital Regional District surpassed $1 billion worth of building permits. In 2017 it cracked 3,000 permitted residential units. Building permits have almost doubled in the five years since; in 2021 the region approved $1.9 billion, including over 5,000 residential units.
Al van Akker, the chair of architectural trades and an instructor in the Camosun College carpentry program, regularly gets calls from companies looking to expand to the Island that are in need of apprentices.
“They see the opportunity here and want to get in on it,” he said. “But by far the most important resource of a construction company is their employees. So it’s not something I recommend, coming to bid on projects here if you don’t already have the crew.”
Good weather and an abundance of work means it’s not hard to attract workers to Greater Victoria—until you factor in the cost of living. “When the price of a home is five times what you can get in Saskatchewan, they’re thinking maybe it’s not so good after all,” Kulmala said.
The price could deter potential workers—or drive up wages, a silver lining to the hot market according to van Akker. “For many years wages have been, I would say, not going up the same way they should in terms of cost of living increase.” With short supply and high demand, paycheques could increase. Some contractors who are recruited from other provinces for a job will negotiate a live-out allowance into the contract. That can put builders in a bind if they hadn’t factored that extra cost into the bid.
Latent demand, changing labour recruitment
For years, municipalities have been dragging their heels on meeting housing demand. That backlog has caught up with them, leading to this new demand for so much construction, Kulmala thinks.
“This should have been happening 15 years ago. Had we been more active in development… we’d be in a better place now.”
Now there’s a lot of work to catch up on, all squeezing through a narrow pipeline of approvals and public hearings. The province has also pointed to this as a problem. Housing Minister David Eby floated the idea of taking away some approval power from municipalities because they say no too often.
On top of demand and local housing constraints there are three other significant factors acting on the construction labour force: retiring baby boomers, halted immigration, and competition for recruiting young workers to the field.
The baby boomers’ great retirement has been forecast for years, and comes as no surprise. What makes it complicated is that the people retiring have years of experience and are typically in senior-level positions that can’t be filled by new recruits.
“If you have a position that requires 15 years of experience, the only way to fill it is to give 15 years of experience. There’s a problem that’s been developing for years,” van Akker said.
It’s not very hard to recruit entry-level employees. Even at Camosun, enrollment predictably decreases when work is booming, because companies are willing to hire people even if they have no experience. But that doesn’t work for senior positions.
When immigration shut down at the start of the pandemic, it also slowly choked the construction labour force.
“It was a hurdle before, it’s become a wall now,” Kulmala said. “Our local population growth is not enough to meet all industry demands, and not just in construction but every other sector, too.”
As of the 2016 census, immigrants made up over a quarter of BC’s population growth (28%), total employment (30%), and the construction labour force (25%). BC was second only to Ontario, and well above the national average. And last year BC had by far the highest intraprovincial migration in Canada, just over 34,000 people. Most of them came from Alberta and Ontario, which both had net negative migration (17,000 and 11,000 respectively). (Statistics Canada did not include data showing where the 34,000 new British Columbians work.)
Even as immigration opens up again and BC is consistently among the top destinations in Canada, there is some concern that the construction industry is recruiting a smaller share of the newcomers. European newcomers have traditionally been a reliable source of construction workers, according to market research organization BuildForce Canada. But that trend is threatened as fewer Europeans are immigrating to Canada, among higher demand in Europe for construction workers of its own. India, China, and Philippines are where most Canadian immigrants are coming from as of 2018, and data shows they make up a very small percentage of the construction force.
If builders are to supplement labour from a population that likely already has a place to live, the place to look is young people entering the job market. The Victoria Residential Builders’ Association executive director Casey Edge went so far as to say the shortage could be solved if post-secondary institutions would get on board. Edge has tried to promote practical skills electives at the University of Victoria, but so far it hasn’t said yes. He’d love to see a general arts student take a carpentry course as an elective. It would provide the student with exposure to the industry, and produce more well-rounded graduates from the university, he argues. He thinks a lot of young people don’t realize how interesting construction is. Practical exposure could make some students realize the work appeals to them.
“Houses are being built to a very high level of technicality now, it’s not just simple framing. It’s a very interesting field, but the problem is we’re not providing the opportunity at a younger age,” he said. “We could address these shortages, quite honestly, if the post-secondary institutions got out of the Dark Ages. People are stuck in preconceived notions of what a carpenter is and what a university student is.”
Kulmala agrees there’s an opportunity to recruit more students. He sees it as competition with other sectors, namely computers and technology
“There is a lot of competition for workers. Sectors like IT are really aggressive in trying to find people, and it’s where our young people are being focused now. The internet is so central to who they are and how they work, that they can easily see themselves in that field,” he said. “We’re missing an opportunity to motivate young people to pursue the trades.”
Between retiring construction workers, the incredible amount of work on the South Island, and the record-breaking housing shortage, there is no immediate relief in sight for builders trying to hire. But slowing down isn’t a good option either, Kulmala said. We need more workers to build the needed housing—but then they fill the housing, and more people move here and it’s still not enough.
“It’s a vicious circle,” Kulmala admitted. “Development will happen at the rate it can occur, but you’re never going to be able to build cheaper than you are today. Deferring isn’t the right decision because even though it’s more now, it’s going to be more later too.”