BuildForce forecasts hiring gap of as many as 119,000 workers in Ontario
Ontario contractors could need to recruit as many as 119,000 workers over the next ten years to replace retirees and keep up with a hectic pace of growth.
That was one of the key findings in the 2023–2032 Construction and Maintenance Looking Forward report for Ontario published by BuildForce Canada on April 25. The report looks at the ten-year labour market for key trades and occupations across the province’s residential and non-residential industries.
The forecast report calls for many of the province’s five regional construction markets – Eastern, Central, Southwest, North and the Greater Toronto Area (GTA) – to be affected by tight labour market conditions until at least 2023 as ongoing activity in both the residential and non-residential sectors builds employment to a peak and adds pressure to already-tight recruiting conditions.
Heading into its forecast period, BuildForce says activity in Ontario’s residential sector will be influenced by several key variables. Rising interest rates are expected to contract the province’s new-housing construction sector in 2023 and 2024. These contractions will be moderated somewhat by strong migration into the province, while overall residential activity will be supported by a renovation and maintenance sector that is expected to grow continuously through 2032. After contracting slightly in 2023 and 2024, overall residential employment is expected to reach a peak in 2030, before slowing through 2032.
Meanwhile, the province’s non-residential sector is projected to grow across the forecast period. Employment is expected to reach a peak of 16% above 2022 levels in 2027 as work culminates on many major projects, like the light-rail transit and subway projects in and around the GTA, the ongoing nuclear refurbishments at Bruce Power and Ontario Power Generation, and major health-sector and other institutional projects across all regions.
The outlook for the complete forecast period sees construction and maintenance employment rising to a peak in 2028, by which time it will have increased by nearly 8% above 2022 levels. By 2032, however, it is expected to slow to 5% above 2022 levels, with growth pronounced in the non-residential sector (+11%) and a more modest expansion of 2% forecast for the residential sector.
BuildForce cautions that those numbers do not take into account the federal government’s goal to double the number of new homes built across Canada over the next 10 years, nor the anticipated increase in demand for construction services related to the retrofit of existing residential, industrial, commercial, and institutional buildings to accommodate the electrification of the economy – any of which could significantly alter demand projections.
“Ontario’s construction and maintenance sector is poised for a number of years of strong growth,” says executive director Bill Ferreira. “Its challenge will be working within already-taxed labour markets. A number of older workers who exited the labour market during the COVID-19 pandemic have been slow to return. This fact, combined with steady employment gains, has pushed construction-sector unemployment rates to record-low levels. The situation is further complicated by the loss of skills and experience created by the departure of these older workers, and which cannot easily be replaced by new hires.”
One of Ontario’s challenges is that labour mobility among its five regions will be constrained. With each operating at or near capacity for the foreseeable future, workers are unlikely to leave one region for better opportunities elsewhere.
Central Ontario has seen its construction sector bolstered in part by a significant outflow of residents from the Greater Toronto Area in recent years. Pandemic-driven work-from-home arrangements, combined with improved rail transportation and a lower cost of living, have helped to advance new-housing construction in the region.
The region’s housing market is expected to contract in 2023 due to rising interest rates, but return to growth by 2025. Non-residential employment, on the other hand, will be sustained by a combination of major engineering-construction projects, many of them in the Hamilton area. Total construction employment is anticipated to add 1% over 2022 levels, with increases exclusive to the non-residential sector.
Eastern Ontario reported some of the tightest labour markets in the province in 2022, with most trades and occupations strained. Although recruiting challenges are expected to ease in the residential sector in the near term, the outlook for the non-residential sector suggests challenges could remain through 2027 and 2028.
The regional market is benefiting from a series of high-value public-sector projects, including the second phase of Ottawa’s light rail line, the redevelopment of Parliament Hill’s Centre Block, and the refurbishment and construction of several other federal buildings. New hospital projects in Ottawa and Kingston add to market demands in later years. Overall employment rises to a peak in 2027 and moderates thereafter.
The Greater Toronto Area’s construction market is underpinned by a series of large-scale public transportation, nuclear refurbishment, new hospital, and other government building restoration projects that bring non-residential employment to a peak in 2027. Meanwhile, the regional residential sector is expected to emerge from a short contraction by 2024 and will be supported by a combination of a growing and aging housing stock that requires continual maintenance, and by a general trend of older individuals investing in their homes to age in place. Overall construction employment is expected to grow by 16% over 2022 levels by 2032.
The construction market in Northern Ontario is heavily influenced by activity in the mining and utility sectors. With both expected to report strong gains in 2023, and with work on the Thunder Bay correctional facility and the Weeneebayko hospital scheduled to begin in later forecast years, non-residential employment should be sustained at elevated levels through at least 2027. The outlook for the residential sector follows a similar trend.
Finally, Southwestern Ontario has been supported by a strong housing market, also driven by out-migration from the Greater Toronto Area. After a brief decline in 2022, the regional residential market should rise to peak employment by 2027 before receding in later years. The local non-residential sector, meanwhile, begins the forecast period operating at elevated levels, with ongoing work on the Bruce Power nuclear refurbishment, the Gordie Howe bridge, new battery manufacturing and auto retooling investments, and a significant rise in industrial shutdown/turnaround maintenance work in Sarnia. The proposed start of the Windsor acute care hospital in 2026 adds to employment later in the period. By 2032, Southwestern Ontario’s construction sector is expected to contract modestly from elevated 2022 levels.
As if these peak demand challenges weren’t enough, BuildForce is anticipating that the sector will have to contend with the challenge of replacing an aging workforce. By 2032, an estimated 82,600 workers, or about 18% of the current labour force, are expected to retire, taking with them skills and experience that will be difficult to replace.
The industry has been able to grow the component of younger workers in its labour force in recent years. By 2032, it is expected to recruit approximately 88,400 new entrants under the age of 30 from within the province.
Contrasted against the number of projected retirements and the number of workers required to meet growing demands, the industry could face a gap of as many as 30,500 workers that will need to be filled from a variety of sources outside the existing labour force.
BuildForce’s report suggests that more can be done to bring women into Ontario’s construction sector. In 2022, the industry employed approximately 70,400 women. Although that number is a boost of nearly 3,000 from a year previous, just 23% worked in on-site activities.
Women represented just 4% of the more than 435,000 tradespeople employed in the province last year.
Indigenous People, meanwhile, made up about 3% of Ontario’s construction labour force in 2021. That figure is slightly higher than the 2.5% represented in the overall labour force.
Finally, the immigrant population, which is expected to grow in the coming years, could be an important source of labour force growth for the provincial industry. In 2021, they comprised 27% of Ontario’s construction labour force.