Canada's Construction Sector Faces Worker Shortage Despite Growth

📅 2 weeks ago

A recent report highlights the growth in Canada's construction sector, projecting significant employment increases but also a looming worker shortage, particularly in nonresidential construction.

Canada's construction industry is experiencing significant growth, as detailed in a recent report by BuildForce Canada, which indicates that employment in the sector has surged to 1.25 million by the year 2025. This upward trend is expected to continue in the coming years, especially within the nonresidential segment of the market. However, alongside this growth, the report emphasizes a pressing need for a considerable influx of workers to both replace those retiring and to satisfy new hiring demands. Firms that proactively develop their current workforce and tap into less conventional labor sources are likely to be in the strongest position to navigate this challenging environment.
According to BuildForce’s findings, nonresidential construction employment saw a two percent increase in 2025. Projections suggest that this upward trajectory will persist, with a forecasted growth of seven percent, leading to a peak of approximately 700,000 workers by 2035. This growth is anticipated to be fueled primarily by industrial, commercial, and institutional (ICI) construction and maintenance activities, although the engineering sector is expected to witness a decline.
A significant challenge facing the industry is the impending retirement of a large segment of the workforce. BuildForce projects that over the next decade, 20 percent of Canada’s construction labor force will retire, resulting in nonresidential hiring needs estimated at 188,700 positions by 2035. Unfortunately, the incoming workforce is not expected to meet this demand, leading to an anticipated shortage of more than 30,000 workers by that same year.
In contrast, residential construction employment also grew by two percent in 2025, but the outlook for this segment is markedly different. The slowing population growth in Canada is expected to dampen the demand for new housing, prompting BuildForce to forecast a decline in residential employment through 2028. By 2035, residential employment levels are projected to settle at four percent below those of 2025, as anticipated gains in renovation and maintenance work fail to counterbalance the downturn in new construction.
The reduced workforce in the residential sector will narrow its labor gap compared to the nonresidential segment. BuildForce estimates that the residential sector will require 117,500 new workers by 2035, but only 113,600 are expected to enter the workforce, resulting in a shortfall of 3,900 workers.
The projected labor shortages in both construction sectors will intensify competition for available workers. As construction investments continue to rise, companies will increasingly vie for a diminishing pool of labor, particularly in the nonresidential sector. Consequently, retaining the existing workforce will become crucial. Employers who invest in employee training, offer competitive salaries, and foster a positive work culture will likely incur lower costs associated with turnover as the pool of available labor shrinks.
Furthermore, the construction industry must consider tapping into traditionally underrepresented labor demographics. Currently, women make up only about six percent of onsite construction jobs, while Indigenous peoples account for less than five percent, despite being one of the fastest-growing populations in Canada. Additionally, new immigrants are underrepresented in the construction workforce relative to their overall presence in the labor market. As population growth slows and labor gaps expand, these groups could play a vital role in addressing the looming workforce shortages.
Devin Bell, an associate economist for ConstructConnect, emphasizes the importance of these findings for the future landscape of Canada’s construction industry.

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