Considering the Canadian construction industry’s complexity and scope, experts envision both hope and worry heading further into 2025.

By Robin Brunet

The primary factor affecting the way construction professionals in Canada approach the next 12 months is an economy that, on one hand, exhibits abating inflation and strong demand, but on the other is wracked with uncertainty due to impending American tariffs and other developments.

Tristan Bertram, director of industry affairs at the Thermal Insulation Association of Canada, summarizes the roller coaster of sentiment his colleagues are feeling.

“Perhaps most obviously, everyone is busy, thanks to huge infrastructure projects, the Kitimat LNG facility in British Columbia and Dow’s Fort Saskatchewan Path2Zero project in Alberta being just two examples,” he says. “Activity in Ontario is equally strong, and the Maritimes is experiencing a lot of marine infrastructure work.

“But our biggest problem is we don’t have enough skilled tradespeople to handle all these jobs,” Bertram adds. “A lot of our insulators are nearing retirement, and our apprenticeship programs aren’t closing the gap.”

The Canadian construction sector, 91% of which is made up of small and medium enterprises, employs more than 1.6 million people and contributes 7.5% of Canada’s Gross Domestic Product. This year, it is anticipated to recover from 2024’s 3.1% output decline and grow at an annual average rate of 2.2%, thanks government investments in transport, renewable energy, healthcare, and education, and a gradual recovery of the residential market.

Rodrigue Gilbert, president of the Canadian Construction Association, believes construction is on the cusp of transformative changes driven by advancements in technology, shifting demographics, and evolving regulatory landscapes. 

As examples, he cites the Integrated Project Delivery (IPD) model, which encourages collaboration among contractors, architects, and owners and can significantly reduce delivery times. “If we are to be more efficient as an industry as well as fight climate change, all collaborative delivery models will have to be vigorously embraced,” he says. “Everybody we talk to is excited by IPD and wants to learn more about it, and it’s increasingly being used in many jurisdictions.”

Gilbert also notes that Ottawa is reviewing the National Building Code to improve energy efficiency, which may necessitate additional investments. “The good news is that this will mean great opportunities for contractors that are part of the solution in achieving stringent energy standards,” he says.

Gilbert also posits possible solutions to Canada’s most pressing social problems. “I think modular housing has great potential, and it’s being promoted by Canada’s National Housing Strategy,” he says. “We will be discussing the possibilities with different levels of government this year, as widespread adoption might require regulatory and supply chain changes.”   

Sean Strickland, executive director of Canada’s Building Trades Union, is keen to address the labor issue. “For far too long we’ve heard the blanket statement that we face a labor shortage, which is simply not true,” he says. “Every year in Canada we take in 300,000 new apprentices, so it’s not like we’re not bringing in fresh talent.”

Strickland continues, “Our shortages are skills-specific and depend on the size and type of projects and their location, among other factors. So what we really need is forensic data in order to accurately understand where skilled tradespeople are located and where we need to deploy them.

To help achieve this, CBTU is increasingly conversing with larger project owners who can tell the organization what kinds of tradespeople they need, how many, and where and when they need them.

“As a result, for a recent major project in southern Ontario, for example, there were no labor shortages, because we were able to bring in workers from other provinces,” Strickland says. “For the record, more than 7,500 Canadian tradespeople have contributed nearly 5.7 million construction person-hours since the project’s groundbreaking in 2022.”

Gilbert agrees that more forensic data is required. “And quite frankly, I think this needs to be undertaken by the federal government,” he says. “However, I’m disturbed that over 30% of construction workers are nearing retirement age and the percentage will grow in a few years. Industry stakeholders and government agencies will need to work harder to promote careers in construction, and we also need to focus on the retention aspect of employment.”

When contacted for input in January, Strickland said his organization’s biggest concern was incoming United States president Donald Trump’s threat to impose 25% tariffs against Canada. “It’s a tremendous worry, and it could knock the wind out of what is otherwise a robust Canadian economy with lots of opportunities,” he says.

Ian Cunningham, president and COO at the Council of Ontario Construction Associations, agrees that tariff threats are troubling, along with uncertainties in electrification that have put several massive battery plant projects in jeopardy. He also cites a perceived lack of urgency on the part of local governments and various local agencies to streamline permitting. “But whenever I mention these elements I always preface my remarks with the comment ‘It depends,’ because it’s impossible to confidently predict what could happen to our industry, good or bad,” he says.

Cunningham prefers to focus on the positive. “As a whole, our industry has great lobbying power, and in my province, we’ve recently seen positive developments such as amendments to the Construction Act, which include broadened access to adjudication and Skilled Trades Ontario poised to take over apprentice registration responsibilities from government and simplify the process.”

Cunningham speaks for many in the construction sector when he says, “There are undeniably headwinds, but it’s within our capability to enact solutions, such as modular housing to rectify the country’s housing shortages and our continued adoption of AI to help alleviate cost pressures. I think we need to keep in mind that Canada will continue to see a strong demand for labor in the coming years, so let’s work together to improve efficiencies and make the most of it.”■