Canada is grappling with a significant labour shortage, as projections suggest that around 700,000 of the country’s 4 million skilled tradespeople will retire by 2028. This looming gap underscores the urgent need for more immigrants to fill the workforce.
Statistics Canada has raised concerns about the widening disparity between the large number of unfilled positions and the shortage of qualified workers, which threatens industries heavily dependent on skilled trades.
Dennis Darby, of the Canadian Manufacturers and Exporters, emphasized the critical role of immigration in addressing this challenge, stating, “We need more immigrants.” Newcomers could play a vital role in replenishing Canada’s diminishing skilled trade workforce, but industry leaders are calling for reforms in the immigration selection process to better support this goal.
Earlier this year, BuildForce Canada, a key industry association for the construction sector, urged the Trudeau government to tackle the shortfall through immigration reform. They noted that, “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.”
Ageing Workforce in Skilled Trades
In Ontario, at least one-third of tradespeople and apprentices are 55 years or older. As these older workers retire, there is a growing concern that they are not being replaced by younger individuals with the necessary skills.
Bill Ferreira, Executive Director of BuildForce Canada, highlighted the demographic challenge, stating, “We’ve seen this issue emerging since the mid-2010s. The latest census and population data clearly show that we are facing a demographic-related challenge.”
Manufacturing Sector Struggles with Labour Shortages
The manufacturing sector, which generated $213 billion in economic activity and provided 1.6 million direct jobs in 2023, is particularly hard-hit by the labour shortage. Darby revealed that over 60% of manufacturers surveyed have had to turn down or lose contracts due to the lack of manpower. This has severely impacted production capabilities.
He further noted that 43% of manufacturers have postponed or cancelled capital investments, emphasizing the critical importance of labour in the manufacturing industry. Darby warned that “Canada isn’t doing enough to close the gap,” and predicted “chronic labour shortages” in the future.
To illustrate the severity of the situation, Darby shared an anecdote about a business owner who was desperately trying to retain an employee by offering flexible working conditions, including reduced hours and customized work schedules.
Economists at the Canadian Manufacturers & Exporters (CME) estimated that the skills shortage in the manufacturing sector cost the Canadian economy approximately $13 billion in 2022 due to lost contracts and delayed investments.
Construction Sector Also Impacted
The construction sector, a $165-billion industry contributing 8% to Canada’s GDP, is also facing significant manpower gaps. A CIBC report from last year identified 80,000 job vacancies nationwide, with half requiring skilled tradespeople.
The report noted that “the industry needs more workers, and fast,” with labour shortages often topping the list of concerns for developers facing supply issues. While a record-high 650,000 people are currently working in Canada’s construction industry, job vacancies have returned to pre-COVID levels, easing some concerns over labour shortages temporarily.
The shortage of skilled construction workers is delaying essential infrastructure projects, driving up costs, and worsening the housing crisis. Public service warnings have alerted the Trudeau government to these challenges.
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 summary, the skills shortage is already taking a toll on Canada’s economy, hindering growth and driving inflation. While governments have started implementing programs to address this issue, experts worry that these efforts may be insufficient and may have come too late.
