Report: Trades shortages could cost Canada $8B per year

Key Takeaways:

• Skilled-trade shortages are rising quickly, with construction job vacancies growing 11% annually and expected to hit 13% per year, potentially creating a 32,000-worker shortfall by 2050.
• Labour shortages are pushing up costs, adding 2.3% to residential construction prices and $7.9 billion annually to renovation and repair expenses, while also raising insurance claim costs due to slower rebuilds.
• Climate impacts and disaster recovery needs are intensifying pressures, with insurers warning that without coordinated government action on resilience, labour shortages and housing challenges will worsen.

The Whole Story:

Labour shortages in residential construction are driving up housing costs and insurance claims, according to a report released by The Conference Board of Canada. Job vacancies among skilled trades have grown at an average rate of 11% annually and are expected to accelerate to 13% per year between 2026 and 2045, potentially creating a shortage of 32,000 workers by mid-century.

The shortfall would increase residential construction prices by 2.3% and add $7.9 billion to the annual cost of renovations and repairs, the report titled ​Building Under Pressure – Skilled Trades Shortages and Rising Construction Costs​ found.

The findings underscore a mounting challenge for Canada’s construction sector as it grapples with an aging workforce, surging housing demand and the compounding effects of climate-related disasters.

“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, Executive Director of Economic Research at the Conference Board of Canada, said in a news release. “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 highlights how labour shortages ripple through the insurance sector. Rising construction costs and extended timelines for rebuilds and renovations increase claims expenses, which insurers factor into premium calculations.

Maximilien Roy, Vice-President of Strategy at the Insurance Bureau of Canada, said the labour crunch compounds recovery challenges following natural disasters.

“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,” Roy said in a news release.

The IBC recently released a Three-Point Resilience Plan calling on governments to stop building in high-risk areas, invest in community resilience and close insurance protection gaps through public-private partnerships and risk-based pricing frameworks.

Roy cautioned that without coordinated action, labour shortages will worsen.

“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,” he said.