Bad news for housing: 71,000 construction jobs shed in Canada this year to date

There are renewed Canada-wide calls to address the national housing crisis by building more new additional supply as a key strategy.

But the country’s capacity for achieving this housing supply through new construction is shrinking, continuing a pre-pandemic trend of a shortage of skilled trade workers.

You might also like:
• Shortage of construction workers is a major challenge for building new housing in BC: CMHC
• Unexpected interest rate hikes put a damper on Canada's home sales forecast
• Home construction costs in Canada soared by 51% during the pandemic
• BC construction companies struggling amidst inflation and worker shortage

Newly released data from Statistics Canada shows the country’s employment in the construction sector dropped by 45,000 positions in July, representing a 2.8% decrease, and 14,000 in June, representing a 0.8% decrease.

For the losses in July alone, British Columbia led with the shedding of 21,000 construction jobs, followed by Quebec’s drop of 11,000 and Ontario’s drop of 9,000.

Over the first seven months of the year, since January 2023, employment in construction across Canada has fallen by 71,000. This offsets the increase of 65,000 between September 2022 and January 2023.

In fact, the construction industry led Canada’s job losses by a wide margin in July, followed by job losses in public administration, information/culture/recreation, transportation/warehousing, and professional/scientific/technical services.

With lower home sales volumes, high borrowing costs for construction financing, and high construction costs for materials and labour due to inflation, housing developers and builders are increasingly seeing pressures with the financial viability of their projects.

A recent report by RBC Economics found home construction costs in Canada soared by 51% during the pandemic since early 2020, with labour being one of the main cost drivers due to the persistent shortage. Labour costs in the construction sector went up by 9.4% in 2022 alone, as projects increasingly need to compete for the same limited labour pool.

Last year, a Canada Mortgage and Housing Corporation (CMHC) study deemed the shortage of construction workers is a major challenge for building new housing, especially in BC and Ontario.

You might also like:
• Shortage of construction workers is a major challenge for building new housing in BC: CMHC
• Unexpected interest rate hikes put a damper on Canada's home sales forecast
• Home construction costs in Canada soared by 51% during the pandemic
• BC construction companies struggling amidst inflation and worker shortage