Canada's Construction Challenge: The Urgency to Build Faster, Cheaper, and Smarter

📅 5 days ago

As Canada faces significant delays in major construction projects, calls for reform are growing. The Independent Contractors and Businesses Association outlines strategies for expediting approvals, reducing costs, and enhancing workforce training to address the country's infrastructure needs.

Canada is currently facing a dire need for construction, with ICBA Economics reporting over $650 billion allocated for major projects in British Columbia and Alberta. These projects encompass a wide array of developments including housing, pipelines, mines, ports, powerlines, LNG plants, hospitals, and water and sewer lines. However, a significant number of these initiatives remain in the 'proposed' stage, awaiting permits, reviews, or financing that often never materializes.
The issue of delays has been brought to the forefront by Prime Minister Mark Carney, who began his term last year emphasizing the need for expedited processes. Unfortunately, many major projects can languish for more than five years before a decision is reached by the federal government. For instance, the approval process for a new mine can stretch up to 15 years. The federal Port of Vancouver has also been trying to expand container capacity at a terminal for nearly 15 years.
The urgency surrounding these delays is amplified by ongoing U.S. tariffs and shifting global trading alliances. Prime Minister Carney has likened the situation to a state of war, asserting that a country at war cannot afford to take 15 years to approve a mine or five years to initiate a pipeline. To enhance Canada's construction capabilities, there is a pressing need to build faster, cheaper, and smarter. This means establishing a federal decision timeline of under a year for every major project, rather than limiting expedited processes to those deemed in the 'national interest.'
Currently, Bill C-5 fast-tracks only a select few projects, leaving the majority waiting in limbo. The government’s role should be clear: set definitive deadlines for project assessments, ensure consistent timelines for decision-making, eliminate overlap between federal and provincial jurisdictions, and apply uniform rules across all projects. A discussion paper released by Ottawa earlier this spring outlines many of these necessary reforms and calls for immediate implementation.
The situation is further complicated by material shortages, as essential supplies often remain stranded outside closed ports. The federal labour minister has intervened nine times since 2024 to resolve shutdowns at rail yards and ports, with closures on the West Coast leading to 24 days of disruption and a staggering $19.2 billion in cargo losses during 2023-24. When ports like Vancouver and Prince Rupert cease operations for steel, glass, and electrical components, construction projects come to a halt.
Negotiations for a new round of port agreements are set to begin this fall. A proposed province-wide bargaining unit, alongside a special mediator and standing arbitration for essential sectors, could create a more predictable framework for operations, alleviating the cyclical crises without infringing on the right to strike.
Cost reduction is another critical area of focus, particularly in residential construction, where expenses have surged by 70% since 2019, compared to a 25% inflation rate across the broader economy. Ongoing modifications to building and electrical codes significantly contribute to this increase. In light of these challenges, Australia and California have opted to pause code updates to safeguard affordable housing supply—a strategy Canada should consider adopting until 2030.
Development charges have also emerged as a substantial cost burden for new homes, often collected upfront when builders face their tightest cash flow. Federal housing funds should prioritize cities that either reduce these charges or defer them until occupancy.
With housing starts in the Vancouver area plummeting by 42% year-over-year in July, the situation is dire. B.C. recorded only 124 presales in the first quarter of this year, a stark contrast to approximately 6,000 in the same period in 2021. The federal GST rebate on new homes currently benefits only first-time buyers, accounting for around 4.8% of completions; expanding this rebate to all new home buyers below $1.5 million could stimulate demand. Additionally, when the foreign buyer ban expires in January, Canada should consider adopting an Australian-style model that restricts foreign purchases of existing homes while permitting them to finance new construction.
To build smarter, Canada must reform its tax system to enhance competitiveness. Currently, Canada ranks 22nd out of 38 OECD nations in terms of corporate tax competitiveness. A report from the C.D. Howe Institute highlighted that Canadian businesses invest only 32 cents in machinery and equipment for every dollar invested by their American counterparts—a trend that predates recent tariffs. With nearly 150,000 federal regulations currently in place, and the average small business spending over 250 hours annually navigating red tape, a significant reduction in bureaucratic burdens is essential. Aiming for a reduction to just 25 hours of red tape could have a transformative impact.
Additionally, workforce training is paramount. Although Ottawa has allocated funds for construction workforce development, the $331 million training-infrastructure fund predominantly flows through union channels. With 85% of construction workers in B.C. and 88% in Alberta not affiliated with building-trades unions, this funding model excludes a vast majority of the workforce. To effectively tackle the historic infrastructure deficit facing Canada, it is crucial to extend support to open-shop contractors, private trainers, and colleges that currently fulfill much of the training needs.
Canada possesses the capital, resources, and talent necessary for construction. What is lacking is a responsive system capable of meeting the demands of the present moment. The upcoming federal budget presents a pivotal opportunity to address this generational challenge.

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