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Monumental workforce increase required to meet housing supply targets to address affordability in Canada

APRIL 11, 2024 – OTTAWA, ON – Echoing the labour shortage concerns that the Canadian Home Builders’ Association has been voicing for many years, today BuildForce Canada released its residential employment outlook for 2024-2033, which projects that to reach the 5.8 million housing starts over the next decade needed to address housing affordability, Canada’s residential construction workforce would need to grow to over 1,030,000 workers – a staggering 83% above the status quo.

“Reaching the Government of Canada’s target of 5.8 million new homes will require nearly doubling housing starts. While that increase in starts should have begun two years ago, the current economic challenges for prospective new home buyers, including higher interest rates and restrictive mortgage rules, did not result in the increase Canada needed, and substantial change is necessary on many fronts to get headed in the right direction. If buyers can’t get a mortgage to buy a home, then builders cannot build,” said CHBA CEO Kevin Lee.

But this study of what it will take to meet the government’s housing starts target gives an important sense of the magnitude of support needed on the labour front if housing starts can begin their necessary increase. BuildForce Canada’s scenario assumes starts would begin to rise this year, peak at 691,600 starts in 2029, and see a gradual de-escalation from the peak though to 2033, at which point historically normal levels of building activity would resume. The corresponding escalation in residential construction investment would be 109%, which Canada needs for its economic growth and productivity.

Meanwhile, Canada’s residential construction sector is currently struggling with an aging workforce, with more than 22% retiring over the next decade, and 40% aging to over the age of 55. The industry has already been dealing for years with the challenge of not having enough new entrants to replenish those who are retiring. Action is needed just to support the status quo, let alone look towards doubling housing starts.

To meet the monumental workforce demands, CHBA calls on the federal government to support the industry by addressing three pillars:

  1. Encourage more Canadians to consider a skilled trade, particularly youth, equity-deserving groups, immigrants and those seeking a second career.
  2. Update the immigration system to proactively attract much-needed skilled workers in residential construction, including enhancing the express entry system to support the specific labour needs of the residential construction sector, including bringing in TEER 5 construction labourers and assistants.
  3. Support increased productivity as detailed in CHBA’s Sector Transition Strategy.

“Canada must fix the current challenges preventing Canadians from buying homes, especially by supporting first-time buyers’ need to enter the market to drive starts. We also need substantial policy change to get houses built faster and avoid adding more costs through things like development taxes and expensive changes to codes. If we can get there, then the industry will indeed be in a position to look to considerably increase housing starts, but will need support to address the labour shortage. A comprehensive approach to financing, policy, labour and productivity is needed to build 5.8 million homes over the next decade. There are levers the federal government can use to help and CHBA’s recommendations on the federal government role, plus our Sector Transition Strategy, if supported, can get Canada on the right path,” said Lee.

Update: Shortly after CHBA issued this media release, the federal government announced 30-year amortizations for insured mortgages for first-time buyers on new construction homes. This measure, which CHBA had been calling for to help address tightened mortgage rules that disproportionately impact first-time buyers, will go a long way in helping that cohort into the market. In turn, it will enable more supply to be built, since without buyers, builders cannot build – this positive step also reinforces the need to pursue labour-shortage solutions. See CHBA’s media release responding to the 30-year amortizations here.

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MEDIA INQUIRIES
Journalists wishing to interview Kevin Lee, Chief Executive Officer of the Canadian Home Builders’ Association are encouraged to submit their request by email to media@chba.ca.

ABOUT THE CANADIAN HOME BUILDERS’ ASSOCIATION
The Canadian Home Builders’ Association (CHBA) is the voice of the residential construction industry in Canada, representing some 8,500 member firms across the country. Our membership spans new home builders, renovators, developers, trade contractors, building material manufacturers and suppliers, lenders, and other professionals in the housing sector.