By Gary Mar and Carlo Dade
Published in the Calgary Herald
April 12, 2023
Canada has another supply chain management problem. This one is in the industrial construction sector and it’s not cement or machine parts — it’s workers.
As an example, look at what’s been happening in B.C. Large industrial construction projects have attracted workers from all over Canada. Between April 2018 and June 2022, about 78,000 more people moved to the province from other parts of Canada than moved out. The net in-migration tide began to turn last summer.
Currently, three large projects — the Trans Mountain Pipeline Expansion, BC Hydro’s Site C dam and the LNG Canada plant at Kitimat — are due to wrap up construction between mid-2023 and 2025, unless the LNG plant’s second phase is approved. This means that about 26,000 construction workers could be laid off from their jobs in the next two years in B.C. alone.
BuildForce Canada, the construction sector council, estimates that with new jobs being created and the current rate of retirement, 113,000 new workers will be needed in the non-industrial construction sector by 2027. About 100,000 of those jobs will require skilled trades, some of which can be supplied by that B.C. workforce.
BuildForce also estimates that because only about half of apprentices in Canada complete their learning programs, the sector will need to attract at least 200,000 apprentices in the next three years. One reason apprentices do not complete their programs is that when big construction projects finish, employers usually lay them off. Apprentices are required to complete a prescribed number of hours before they qualify to write their final exams, and layoffs can scuttle their hopes for completion.
Typical solutions to the worker shortage problem, such as bringing in foreign workers or offering more training, will not solve this issue. What will help is an approach used elsewhere but not really tried in Canada — long-term infrastructure planning.
Countries such as Australia and the U.K. have moved to this system of planning. Using criteria that includes national significance, return on investment and project complementarity, projects identified by governments and the private sector are prioritized, linked and scheduled for decades into the future. That’s correct — decades. These are living plans that adapt to change over time, but their existence creates resource alignments that produce benefits for taxpayers, employers and their workforce.
Taxpayers benefit from long-term planning through better returns on tax dollars. Governments and industry get higher returns on investment from being able to plan for the future with greater certainty. Businesses can also make necessary short-term investments knowing that projects will be built. And workers benefit because businesses can offer more employment certainty and stability, making construction a more attractive career.
Planning is the key element for this to work. Simply setting aside money to fund projects may backfire if the public feels that the money is not well spent.
In a European Union study of the management of transportation infrastructure projects, Canada stood out as the only country surveyed that did not do this sort of planning. The Canada West Foundation report, Shovel Ready to Shovel Worthy, provides a solution for Canada to address the planning gap. This solution was developed in collaboration with private-sector shippers, producers and the construction sector. It has also been introduced to the provinces, which have responded favourably to the idea.
Traditional solutions such as training and improving the public perception of construction as a career are still needed. But these approaches on their own have not proven to be enough to attract workers to the sector.
It’s time to try something in Canada that has been tried and proven elsewhere.
Gary G. Mar is president and CEO of the Canada West Foundation. Carlo Dade is director of the Trade and Investment Centre.