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Canada’s construction industry is navigating a complex landscape defined by record levels of activity alongside persistent workforce constraints.

In 2025, nonresidential construction investment reached unprecedented highs, supported by substantial growth in civil, commercial, and medical construction starts according to °µÍø½ûÇøConnect Insight data.

Despite these strong project pipelines, the construction industry continues to experience slow employment growth, which has the potential to impact project timelines and firms’ profit margins.

Recent employment data highlights this challenge, showing a 0.4 per cent decline in construction employment between January 2025 and January 2026. This marks the continuation of a three-year period characterized by limited workforce expansion, with total employment growing by just under two per cent. As construction activity remains elevated, the industry’s ability to fulfill project demand may be constrained by the ongoing difficulty in building its labour capacity.

Demographic pressures and an aging workforce

Canada’s construction workforce has been aging steadily for decades and the pace of retirements is now outstripping the pipeline of new entrants. According to Statistics Canada, the number of tradespeople aged 65 and older grew by nearly 12 per cent between 2016 and 2021, while youth aged 15 to 24 entering the trades fell by 12.2 per cent over the same period. The result is a workforce that is simultaneously shrinking at the top and failing to replenish from the bottom.

Specific trade declines and temporary solutions

Certain skilled trades have been disproportionately affected by these labour dynamics. Statistics Canada reports significant decreases in the number of employed industrial electricians, concrete finishers, bricklayers and pipefitters from 2016 to 2021.

While some of these declines were offset by non-permanent resident employees — whose numbers more than doubled during this period — this reliance presents its own risks.

Dependence on non-permanent resident tradespeople offers only a temporary solution to a structural problem. These workers are not permanently integrated into the labour force unless they successfully transition to permanent residency status. Consequently, the industry remains vulnerable to policy changes and the transient nature of this labour segment.

Workforce retention and development

Addressing the gap between labour supply and project demand requires construction firms to prioritize both workforce retention and talent development. An inadequate workforce can result in project delays, increased costs and, in turn, reduced profit margins. Companies that cannot meet project staffing requirements could face challenges maintaining competitiveness in a high-activity market.

To respond to these ongoing pressures, firms should invest in comprehensive training and upskilling programs that train current employees and help attract new workers to the industry.

Offering competitive compensation and comprehensive benefits is essential for retaining skilled employees amid heightened demand. Fostering a positive workplace environment also supports long-term retention by increasing employee loyalty and reducing turnover, helping companies to meet evolving project demands effectively.

Devin Bell is the associate economist at °µÍø½ûÇøConnect, where he analyzes the construction economy.