Report: 25 years of stagnating construction productivity

Key Takeaways:

• Over a 25-year period, Quebec construction labour productivity grew by an average of just 0.21 per cent annually compared to 1.44 per cent in the service sector.
• Canadian building permit approval takes an average of 249 days across 12 procedures, significantly exceeding the OECD average of 153 days.
• Technology adoption remains low across the sector, with roughly 25% of construction firms using no information and communication technology and under two per cent utilizing artificial intelligence or robotics.

The Whole Story:

Canadian construction productivity has been flatlined for decades.

A new study found that over a 25-year period, labour productivity in the Quebec construction industry grew by an average of just 0.21% annually.

Compared to the 1.44% annual gains recorded in the service sector over the same timeframe, data indicates that the sector has made minimal efficiency gains per hour worked over a quarter-century.

The findings are detailed in a white paper released by non-profit organization Batimatech. Authored by Batimatech founder Francis Bissonnette and economist Édouard Lacerte, the 2026 report outlines metrics on productivity, technology adoption, administrative timelines, and housing market indicators.

Technology adoption and permit timelines

The report indicates that productivity levels are linked to lower rates of technology adoption. Approximately 25% of construction firms use no information and communication technology (ICT), compared to 20% across all industries. Adoption rates for artificial intelligence and advanced robotics sit below 2% across the sector.

Data fragmentation across non-communicating software tools also impacts project operations.

“What Batimatech describes closely matches what we see on the ground,” said Artem Boiko of Data Driven Construction, quoted in the report. “The difficulty is often less technical than organizational: it means learning to treat data as a resource to be maintained, rather than as a simple by-product of the project.”

Administrative processes also affect project start times. Based on World Bank data analyzed in the report, obtaining a building permit in Canada takes an average of 249 days across 12 procedures. Across OECD countries, the average processing time is 153 days across 12.7 procedures.

Housing market and land value metrics

The publication examines housing affordability using Statista Consumer Insights survey data, which identifies inflation/cost of living and housing as top concerns for Canadians in 2026.

Using OECD price-to-income data, the report places Canada alongside Portugal and the Netherlands among countries experiencing high growth in housing unaffordability relative to 2015 baselines. Citing economic literature, the authors note that 80 to 84% of real estate price increases are attributable to rising land values rather than direct construction costs.

The authors reference economist Thomas Piketty, whose models project that real estate asset yields will continue to outpace income growth under current conditions.

How to fix it

Batimatech outlines several measures to address operational performance:

• Prefabrication: Utilizing off-site assembly, which McKinsey estimates can lower labour requirements by 40% and reduce project timelines by 50%.
• Systemic AI and BIM: Transitioning from standalone tools to process-integrated AI and digital models to manage building data and operations.
• Public Tendering and Training: Dividing public sector contracts into smaller lots to enable mid-sized firms to bid, alongside expanding three-to-four-year specialized vocational training programs modelled on European frameworks.