The government’s handling of the pandemic worsened the country’s trade worker shortage, pushed labour costs even higher, and has left the industry reeling from its effects, say construction industry experts.
As Canada’s lockdowns began and a number of industries were forced to shut down, Richard Lyall, president of the Residential Construction Council of Ontario, says many workers decided to retire early.
“There was the COVID effect, which meant some people left and took pensions. They didn’t come back and we lost productivity, which was huge,” Lyall said. “We lost 25% right off the bat, and while some of them started coming back, it started taking longer to get things done.”
Lyall added Ontario’s construction trades scarcity alone is estimated to reach 119,000 by the decade’s end. The overall trades shortage will exceed that number.
A major consequence of the scarcity is pandemic-induced rules like social distancing cleaved productivity and lengthened construction timelines. Moreover, shutting down the economy also created supply chain bottlenecks that delayed arrival of materials, sometimes leaving trades incapable of doing their jobs when builders finally had them booked.
The result is more expensive construction projects, which are ultimately recouped in sale prices.
Lyall, who says construction productivity declined by 10-15% during the pandemic, argues that even with collective agreements, contracts between employers and unions, the shortage of qualified workers is worsening Canada’s affordability woes.
“Even if you have collective agreements, if you have more work than people capable of doing the work, you’re going to compete for talent, which drives up costs,” Lyall said. “If projects take longer to complete than they normally would, costs go up. Top skilled trades people are worth their weight in gold right now.”
Another reason housing costs increase is land is carried longer, and those higher carrying costs are worked into future project pro formas.
A lot of projects slated for launch in 2020 were delayed a year or two, pushing demand for trades through the roof.
Plumbers, sheet metal and HVAC specialists, to name just a few trades, are insufficient, says Alex Thibault, president of ALT Labour Solutions, a nascent web platform that connects contractors with employers.
Thibault says, because the volume of work vastly outstrips manpower, the difficulty booking a particular trades pushes prices higher.
“It’s the volume of work out there versus the amount of workers in the industry, so pricing is higher, but at the end of the day, your price might still be good, and even though it’s higher than what you’d usually price, the competition are doing the same thing,” Thibault said.
“Let’s say I price a job and I don’t have the manpower, I will price higher, but what we’ve been seeing is we’re still getting the work with the higher mark-up and then struggling to complete tasks because of the lack of labour in the industry,” Thibault added.
Lyall anticipates the labour crunch will worsen in the Greater Toronto Area because, while the shortage puts upward pressure on wages, Canada’s largest metropolitan area is still too expensive for entry-level trades workers.
“We need the workers here but there’s no housing for them because it’s too expensive,” Lyall said. “If you’re thinking of moving to Toronto and you’re a working person, forget it.”
Another impediment is federal regulations striving to achieve net-zero housing, which requires additional training for workers, of whom there aren’t enough while potentially sidelining others.
“It’s a fubar situation. It’s not that they’re so unskilled they can’t learn, but we’re a very a specialized industry,” Lyall said. “You don’t take concrete forming people and turn them into framers overnight.
“Housing is simple, but it’s a complicated industry and we don’t turn on a time. It’s not a speedboat, it’s a supertanker.”