Canada lacks the labor capacity to build the 3.5 million new homes it would need to achieve affordable housing by 2030, and Ontario is likely to form more new households than are built during that time, according to a sobering new report from the United States. national housing association.
The Canada Mortgage and Housing Corporation had set the target of 3.5 million in a report in June, but follow-up research revealed on Thursday showed there will only be enough workers to increase the number of starts in four major provinces: Ontario, Québec, BC and Alberta — by 30 to 50 percent.
While Alberta could meet its needs in such a scenario, the other major provinces would lag far behind.
“Ontario, Québec and BC will need to double the number of starts they can produce in the best scenarios,” the report said.
Dana Senagama, CMHC economist and author of the report, said the agency knew Ontario and BC faced challenges but was surprised by the severity.
“The biggest surprise has been the magnitude of the challenge that lies ahead for all these major provinces,” Senagama said.
If the current pace of new construction continues, the CMHC said the country’s housing stock is expected to increase by just 2.3 million units by 2030, to nearly 19 million units in total.
BuildForce Canada, an industry group in the construction sector, expects these market challenges to continue over the forecast period due to a strong housing market and a growing pipeline of major projects not expected to slow down until 2026. Demographic trends will also be a factor, BuildForce CEO Bill Ferreira said in an interview.
“The latest census data points to the fact that 20 percent of Canada’s population is between the ages of 50 and 64,” said Bill Ferreira. “And only 16 percent are under the age of 50. So if we start looking and looking ahead in the next 15 years, we know that more people will leave the workforce to retire than they will enter the job market.”
CMHC based their capacity measurement on how much the workforce could produce at current wage and skill levels. The agency then used the proportion of housing workers in the population and the minimum number of workers required for a home under construction to calculate the estimated labor capacity.
According to Ferreira, the federal government has introduced a number of new incentives to try to encourage skilled trade companies to support skilled workers with training.
“The reality is that this is probably the most challenging but certainly the most supportive environment the construction industry has probably seen in the last 20 years.”
Still, Ontario, the only province projected to have more new households than homes starting up to 2030, has the greatest skills shortage.
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While other provinces could benefit from expanding the labor pool, “the gaps in Ontario are too great,” the CMHC report found.
The report concluded that “building up” in the form of apartments and converting existing structures into housing units were possible ways to close the gap, as well as programs to bring in more immigrants with construction-related skills and better wages for such workers.
Kevin Lee, chief executive of the Canadian Home Builders’ Association, said prefabricated construction was another possible solution.
“Whether we call it prefabricated construction or factory construction, the idea is that you either build modules or panels in a factory that can then be shipped on site,” Lee said in an interview.
This way of building has become popular due to the ‘tiny home’ trend, but Lee says it is also possible to build a typical detached house and multi-family homes this way. The challenge is the overhead costs.
“Because of the overhead costs associated with having a factory, it can be a bit more difficult to sustain. But due to the shortage on the labor market that we are currently dealing with, it is becoming more and more logical to invest in this way of building’, he says.
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