The Canadian construction job market has cooled after a few frenzied years in the immediate aftermath of the worst of the 2020-21 COVID pandemic. Job vacancy rates in the sector have retreated from the record highs recorded in 2022-23 – dropping from 7.1% in Q1 2022 to a little over 3% recently. Previous acute shortages of skilled construction workers have eased, and wage increases have been tempered – albeit only modestly. To be sure, the state of the construction job market varies by province and also by industry segment. For example, residential construction is in a “recession” in B.C. and Ontario, but is doing better in Alberta and some other regions. The picture in non-residential construction – consisting of commercial/industrial building, infrastructure projects, engineering construction, and public sector activity – is mixed across the country.
ICBA is mainly interested in the B.C. and Alberta markets, as that is where our members and clients are concentrated. Looking ahead, we are increasingly worried about the risk of significant talent shortages emerging for qualified construction workers in both provinces, particularly in the non-residential segments of the industry.
According to the latest count, B.C. and Alberta, added together, have a combined “major project” inventory amounting to roughly $650 billion of cumulative capital spending. The listed projects include some where construction has started and many others that are in the planned/proposed stage. And while history teaches that some proposed projects end up being delayed, shelved or cancelled altogether, many do in fact move ahead.
At present, British Columbia and Alberta are each home to a number of large-scale projects where construction is already underway (e.g., the giant Dow petrochemical plant in Alberta, several mining projects in B.C., and large public sector projects in both provinces). As noted in a recent ICBA Economics blog, according to the latest official count, Alberta has $80 billion worth of major projects under construction. And while up to date government-issued statistics are no longer available for B.C., we estimate that the figure is similar if not a higher in that province.
The “major” projects tracked by the two provincial governments encompass the entire economy and include multi-family residential development; commercial and industrial building; engineering and infrastructure projects (e.g., roads, bridges, water/wastewater projects, pipelines, and telecommunications infrastructure expansions and upgrades); and the construction of government-funded buildings and other facilities in areas such as health care, education, recreation, and community services.
This leads naturally to the outlook for construction workforce demand and supply in the coming years. On this topic, the most widely used source is the set of rolling forecasts produced and periodically updated by BuildForce Canada.
Figure 1 summarizes BuildForce Canada’s overall construction labour demand/supply forecasts for B.C. and Alberta over the period 2026-2035. The projections cover all parts of the construction industry and the related workforce. The authors of the report estimate expected retirements and the number of new entrants to the industry; they also try to account for the impact of future economic and population growth on the demand for construction labour. The effects of AI and automation on labour demand and how construction as an industry operates are not systematically addressed in the BuildForce analysis.
Figure 1
Dealing first with British Columbia, BuildForce sees employment in the residential construction industry (including renovation) declining by 13% by 2035, vs. 2025 levels. This reflects the current weakness in homebuilding and an assumption that housing starts in B.C. will be lower than historical trends over much of the projection period – in part due to sluggish population growth. In contrast, non-residential construction is expected to pick up in the next few years and peak in the late 2020s, fueled by significant project-related activity in the mining, energy and infrastructure sectors as well as continued robust capital spending across the broad B.C. public sector.
Turning to Alberta, BuildForce’s projections similarly posit a fall-off in jobs in the residential segment of the industry on the back of slower population growth, with employment in the homebuilding and renovation sub-sector predicted to fall by 16% by 2035 vs. 2025 levels. As in B.C., non-residential construction is on track for stronger growth, which in turn will be reflected in labour demand. BuildForce sees investment rising continuously over the projection horizon, driven by significant projects in the energy, pipeline, transportation, and manufacturing industries as well as buoyant government/institutional capital spending. Non-residential construction employment in Alberta is expected to jump by 15% by 2035.
ICBA Economics values the reports produced by BuildForce, and we rely on their detailed analysis and forecasts in some of our own work. That said, we believe their latest projections have underestimated the likely strength of construction demand – and hence the need for construction workers -- in B.C. and Alberta. This judgement is based on several factors:
In short, we foresee the potential for substantially larger “gaps” in construction labour supply relative to demand than BuildForce is assuming over the next 5-10 years, spanning most parts of the construction business in B.C. and Alberta. We would not be surprised if actual shortfalls in the construction workforce – representing the gap between available positions and available workers – were 3-4 times greater than the smallish estimates BuildForce has published. The question of how to fill these labour supply gaps – should they materialize – will be taken up in future ICBA Economics posts.