Canada’s severe housing shortage shows no signs of abating, with affordability challenges deterring buyers, construction starts lagging, and unprecedented population growth intensifying demand. While the construction sector holds the key to solving this crisis, it must first confront its own systemic challenges to meet the nation’s housing needs effectively.
Labor Shortages and Underutilized Talent
A recent Desjardins report highlights critical industry weaknesses, including chronic labor shortages, soaring building costs, stagnant productivity, and sluggish economic growth. Principal Economist Marc Desormeaux notes that the sector fails to maximize its existing workforce potential, with women facing workplace barriers and immigrants remaining underrepresented.
Despite record population growth—over one million new residents annually in 2022 and 2023—only 5% of recent newcomers work in construction, far below the sector’s 8% share of overall employment. The Bank of Canada estimates that tripling the influx of non-permanent residents into construction is necessary to balance workforce demographics. Even skilled trades immigration remains underutilized, with just 455 permanent residents admitted under the Federal Skilled Trades Program in 2022.
1Productivity and Innovation Deficits
Addressing labor gaps alone won’t resolve the housing shortfall. The report advocates for productivity-boosting measures such as:
- Modular and prefabricated construction to accelerate builds
- Digital adoption, including Building Information Modeling (BIM)
- Streamlined approvals processes to reduce delays
Richard Lyall, President of the Residential Construction Council of Ontario (RESCON), emphasizes that regulatory bottlenecks severely hamper efficiency. “If compliance takes three times longer, productivity gains from new technologies vanish,” he explains, urging faster permit approvals and federal BIM mandates.
Economic Headwinds Compound Challenges
High interest rates, elevated construction costs, and weak economic growth further constrain the industry’s capacity. Desormeaux warns that builder sentiment may depress construction activity precisely when housing needs are most acute.
While policy interventions—like development charge reductions for first-time buyers—could stimulate affordability, systemic reforms across workforce development, regulatory efficiency, and construction innovation remain imperative. Without addressing these foundational issues, Canada’s housing crisis will persist despite demographic urgency and political pledges.
The path forward is clear: only by healing its own ailments can the construction sector fulfill its vital role in housing Canada’s growing population.
