Ontario Construction News staff writer
Labour shortages in Canada’s residential construction sector are helping drive up the cost of housing and adding pressure to rising home insurance premiums, the Conference Board of Canada warns in a new report.
The study, Building Under Pressure – Skilled Trades Shortages and Rising Construction Costs, says shortages in key trades are expected to worsen without swift government action, costing Canadians almost $8 billion more per year by 2045 as the price of construction and repairs climbs.
“The construction sector will continue to face challenges as it deals with an aging workforce and an increased demand in housing, among a variety of other factors,” Tony Bonen, the board’s executive director of economic research, said in a statement. “Stakeholders and all orders of government will need to work collaboratively to ensure Canada has the skilled workforce necessary to meet the growing need for housing.”
The report says labour shortages are already eroding the sector’s ability to meet demand:
- Job vacancies in skilled residential trades have risen by an average of 11 per cent per year and are expected to grow by 13 per cent annually between 2026 and 2045.
- The shortage of skilled trades could reach 32,000 workers by 2045, pushing sector prices up by an estimated 2.3 per cent.
- Those pressures could add $7.9 billion annually to the cost of residential renovations and repairs.
- Increasing climate-related disasters and a growing need for new housing are intensifying the pressure on labour supply.
The analysis also links the labour crunch to higher home insurance costs. Fewer available tradespeople mean post-disaster rebuilds and repairs take longer and cost more, driving up insurers’ expenses and ultimately premiums.
“Insurance Bureau of Canada has been raising concerns about labour shortages for years, as they have a significant impact on insurers’ ability to help Canadians recover in a timely manner after a natural catastrophe,” said Maximilien Roy, IBC’s vice-president of strategy. “At the same time, we are seeing governments across Canada rush to tackle the ongoing housing crisis and, too often, planning decisions are being made that place new housing in areas at high risk for flooding, fire or hail.”
IBC recently released a three-point resilience plan to help governments better protect communities from climate-related disasters. Its recommendations call for improved land-use planning to prevent homes from being built in high-risk zones, increased investment in hazard mapping and resilient public infrastructure, and steps to close insurance protection gaps through risk-based pricing and stable regulatory frameworks.
“IBC supports government efforts to build the new housing Canada needs, but the lack of a plan to ensure communities are protected from the impacts of wildfires, floods and other natural disasters will further exacerbate skilled labour shortages,” Roy said. “In addition, investments in programs to overcome the labour crunch must be complemented with policy decisions that protect vulnerable communities, ensure the continued sustainability of the home insurance market, and reduce the financial and emotional tolls of natural disasters.”