What does it take to grow a company from nothing into something in today’s competitive construction market?
These three companies have it in spades. SiteNews sat down with leaders from ETRO Construction, Tahltan Nation Development Corporation, and Inferno Solar to see what their keys to success are and what their journeys have been like.
Inferno Solar
Inferno Solar president Curtis Craig was green from the start.
He was raised in Alberta with an appreciation for the land, visiting grandparent’s farm every week. They grew just about everything that would in the prairies: peas, carrots, potatoes, dill, strawberries and more.
“One thing my grandpa did that always stuck with me, is that he was a steward of the land,” Craig said. “There was land he farmed and land he voluntarily set aside for recreation so people in the community could use it for free. Those things were important in shaping who I am and what I value and gave me an appreciation for the environment.”
After high school, Craig’s father got him a job sweeping floors and doing general labour on construction sites.
“It clicked for me and I progressed rapidly in that role to being a siding installer by the end of the summer,” said Craig. “It felt like a big change for me. I had found something I liked and I was good at.”
Craig was soon able to line up an electrician apprenticeship, which he enjoyed even more. His hard work and aptitude propelled him forward and at 21 he had apprentices of his own that were decades older. When Craig began to plan his next career move, a carpenter and civil engineer steered him towards engineering. He applied to the University of Calgary and was accepted.
“It was not a really enjoyable time. It was a really difficult program and a pretty hellish time but after coming out, I realized he had been right,” he said.
After school he worked for an electrical consulting company. While doing his day job he always kept his eye out for other opportunities on the side to get experience. He got into designing solar systems for schools and became a subject matter expert at the firm.
“I dove in wholeheartedly and did a pack of three schools with solar on them,” he said. “I also had set up a corporation to do consulting or start my own business. A family friend had presented an opportunity to put solar on a Telus project but I would likely have to quit my day job or work evenings and weekends. I felt that I couldn’t advance as quickly as I would like at the engineering firm.”
So Craig went for it and quit his job.
“I thought ‘to hell with it’,” he said. “Renewable energy, generating power, living a sustainable life, leaving the planet better than I found it – it was a cool opportunity. I quit my job, got my business license.”
The move has since grown into Inferno Solar, a turn-key approach to solar systems that includes everything from project management, design, and engineering, to procurement, construction, and installation.
“It has stretched me personally and professionally and I have grown in ways I never expected,” said Craig. “It’s exciting and we are starting to see the fruits of our labour.”
He explained that while Inferno has focused on rooftops, the solar sector, more broadly, is taking off right now with ground mounted work. This is because that is where the energy is needed at the end of the day, without the need for additional transmission infrastructure, and it’s where Inferno’s expertise is as commercial electricians and commercial electrical engineers.
Inferno Solar says it has found a niche in rooftop solar projects. – Inferno
“Plus it looks terrific and lowers operating costs,” he said, adding that Alberta also has an open mind when it comes to power. “Anybody that wants to generate power can do so. We are ground zero for power purchase agreements for companies that want renewable energy because, as far as I know, we are the only jurisdiction that allows these big deals.”
Labatt Brewing, for example, is procuring all their electricity through clean energy. RBC, Amazon, Microsoft and Telus all have power purchase agreements for solar.
Craig added that there is also very favourable legislation around generators large enough to match loads on these sites. Crews can build up to 5,000 kilowatts of solar on a site.
“While B.C. allows you to do this, you can’t export,” he said. “Saskatchewan is similar and they have less red tape to do larger scale solar projects. Saskatchewan is very limited in their appetite for rooftop solar and as very restrictive on what can be installed, and protective of their market.”
Craig noted that this reduction in red tape has resulted in billions of dollars in solar investment in Alberta. To take advantage of this boom, Inferno has found its own niche.
“There are guys out there that do panels on top of piles in farmland to connect to a grid,” he said. “That’s good to a point. But what about getting energy where people need it? If I’m a company with 50 fleet vehicles and I want them all EV, why can’t I generate power right where I need it and charge my vehicles?”
Craig explained that this opens the door to Inferno’s third product, battery storage. He believes that the sector is close to a point where on-site solar and on-site EV charge and on-site battery storage will have such an economic benefit to a business that it would be foolish not to do it.
Last fall, Exro Technologies Inc., a clean technology company that has developed new generation power control electronics, announced a strategic development and distribution agreement with Inferno. They plan to work together to bring economical battery storage to Western Canada.
Craig believes a major part of Inferno’s success has been its people, speed and expertise.
“We have some great people and all of us are aligned on values and mission,” he said. “Our values are do what you say, stand by your word, give a price and know the scope. We say that we are the experts so the price shouldn’t change. Not once have we asked for a change order on a solar contract.”
Tahltan Nation
Tahltan Nation Development Corporation (TNDC) was founded in 1985 by Tahltan Nation leaders to be the business arm of their community. The Nation wanted to ensure the Tahltan Nation benefits from the economic activities and development occurring within Tahltan Territory and to provide employment, training, and contracting opportunities to Tahltan members.
Today it is one of the biggest Indigenous businesses in B.C.
Early on, major mining projects helped propel it forward. Between 1990 and 2008, TNDC and its JV partners secured more than $200 million in contracts at the Eskay Mine with Homestake Mining, North American Metals, and Barrick Gold. Between 2007 and 2009, TNDC established additional joint ventures to secure contracts on Novagold’s Galore Creek project and provide employment opportunities for Tahltans.
From its roots in residential construction, TNDC’s services have expanded to heavy construction, earthworks, camp services, air support, aviation, forestry, transportation, and fibre-optic communications services. To achieve this expansion, TNDC has partnered with more than 20 industry leaders.
“This enables us to combine our respective strengths and capabilities, benefitting TNDC, our partners and our clients,” said corporation officials. “With each achievement, TNDC and our employees gained experience, grew our reputation, and built our equipment fleet.”
In recent years, new TNDC ventures like the Airport Services division, the Fibre Optics Division and Forestry Division, are providing new revenue streams as well as year-round employment and emerging career opportunities for local Tahltans. While TNDC continues to diversify its business, exploration and mining remain the primary industry it serves, and heavy construction and camp services are its core operations.
TNDC crews work at the Red Chris mine in B.C.
Recently, TNDC and its partners have been helping to advance Seabridge Gold’s KSM Project and Skeena Resources’ Eskay Creek Revitalization Project. Its largest client is Newcrest Mining Limited, which operates the Brucejack and Red Chris mines. At the Brucejack Mine, TNDC is delivering underground tunnel development, ground support and production services.
Together with its partners, the scope of services TNDC is providing at Red Chris includes crew transportation by air charter and highway coach, camp services, tailings impoundment area construction, underground mining portal exploration, underground explosives, geotechnical and exploration drilling, and concentrate hauling.
In 2021, TNDC began operating the Dease Lake Airport, responsible for inspections, maintenance, and ongoing operations. TNDC is serving mining charter and medevac flights, providing air freight bulk diesel sales to exploration companies, and established a heli-base to operators needing local logistical help.
As the business arm of the Tahltan Nation, TNDC is owned by its shareholders – Iskut Band, Tahltan Band, and Tahltan Central Government. A portion of profits are returned to the shareholders through annual dividends for initiatives to benefit Tahltan members.
TNDC also provides community donations, hosts an annual Christmas Party, and provides equipment services in-kind. The other significant contribution is employment and training opportunities for Tahltan members and Tahltan-owned businesses.
Going forward, TNDC said it wants to focus on people, partners and clients.
“We are implementing strategies to attract, retain and develop the talent we need and investing in our people through training, development and mentorship, helping our employees grow their careers, and into leadership roles,” said officials.
A key goal in 2023 is achieving WorkSafe BC Certificate of Recognition (COR), a voluntary and coveted benchmark of corporate health and safety excellence.
Another key goal is to be the Indigenous partner of choice to clients and business partners. The company explained that working with tier 1 mining companies requires TNDC to have tier 1 practices, processes and governance across every area of the business.
Collaboration will continue to be an important strategy to help drive TNDC’s growth.
“TNDC’s goal is to be an integrated full-service provider and trusted partner to clients,” said officials. “TNDC brings value to our clients with local knowledge, operations, personnel, and equipment. But to secure new contract opportunities and expand our capabilities, we have partnered with several providers who are leaders in their sectors.”
One area of opportunity in mining is the implementation of advanced technologies like equipment automation, digital tools, and battery powered equipment in operations. TNDC’s new partnership with Swedish multinational engineering company Sandvik will be at the forefront of bringing these innovations to the sector.
“TNDC’s future is incredibly bright. TNDC is on a transitional journey from a small community-owned business into a sophisticated powerhouse Indigenous business that is charting a new course to long-term growth, prosperity and new opportunities for the Tahltan Nation,” said Carol Danielson, chair of its board of directors. “TNDC has the right leadership and strategy in place to ensure its long-term sustainability for generations to come. Working together as one team and in collaboration with our clients, partners, employees and shareholders, TNDC will achieve its goal to be the Indigenous Business Partner of Choice.”
ETRO Construction
When Mike Maierle started at Ledcor as a junior estimator he was just 19 years old.
He worked his way up in the Vancouver office and moved to the Bahamas to run a major airport project for the company.
His time there was a turning point that sent his career in a completely different direction.
“Down there I got a case for being independent,” he said. “I was left alone in some ways with a lot of autonomy. It opened my eyes to maybe trying something on my own.”
He got home and reacquainted himself with the Vancouver market for several years as director of pre-construction. Opportunities were ahead of him.
“My career was whatever I wanted it to be, maybe even president, but that didn’t interest me,” he said. “It meant taking over a cruise line versus starting my own little ship that could be more dynamic. Ledcor is an amazing company but it was changing from the company I started at. I wanted a small, dynamic organization that could change quickly without navigating the corporate world.”
On Canada Day in 2015 he woke up and put in his notice, shocking the company. 90 days later, he was starting ETRO in his basement doing one small project with his friends.
“For the first few months I delivered lumber, I was site superintendent, the accounting clerk – I wore all hats,” he said. “I got on the phone and started to see who had opportunities and as those opportunities came my way, we slowly started to build out the team.”
One of ETRO’s earliest employees was director of construction Dan Chyzowski who spent time with Maierle working on Ledcor’s airport project in the Bahamas.
“When Mike started it was really under this vision of building stuff differently with a focus and foundation of people, leveraging technology, and automating what you can so we can focus on building relationships,” said Chyzowski. “We’re tired of saying ‘this is how we have always done it’ and we are focused on finding newer, better, more sustainable ways to build projects and building a team of like-minded people. I think that’s really at the foundation of growth.”
The next year, ETRO had eight employees and enough small projects to get things rolling. This freed up Maierle to focusing on growing the businesses and developing its own way of doing things. He had to prove to the industry that his success in the past wasn’t just because he was at a large, sophisticated company. This meant going from doing billion dollar projects to one’s well under a million dollars.
And early on, Maierle wanted to make sure the small company could implement structures and processes that would contribute to employee success.
Each new project proved themselves a little more and led to more projects. Their first few residential projects led to a large credit union project north of $50 million with PCI. This led to a major retrofit in English Bay and then the complex 411 Railway project. They also were tapped to do a series of challenging specialty projects at Parq Vancouver which earned ETRO a Gold Award from the Vancouver Regional Construction Association (VRCA).
“So many projects led to the next one and today we are in a position where we have dozens of projects in front of us,” said Maierle. “We have the trust of the market and compete with the big guys now.”
ETRO has almost 100 people, $350 million in work underway and more than $300 million in backlog.
“We have gone from using a folding table at work to one of the top general contractors in Vancouver,” he said.
A major part of this growth has been forging strong relationships with owners, partners and trade partners. Maierle added that ETRO’s story and culture has also contributed, attracting talent. He praised ETRO’s pre-construction and planning department, which is so good that clients will pay more for it.
“We are very open and transparent about our story, showing people what we are up to and talking about it,” said Maierle.
An ETRO employee checks the ETRO Milestone App. – ETRO
And he believes the company is only partially done evolving.
“We are evaluating every aspect of our business and how it can be exceptional. There is no status quo. There is no process that isn’t evaluated regularly.”
To stay on top of projects, ETRO created its own application for milestone tracking. It features a dashboard that identifies where projects are in the schedule and if they are falling behind. This dashboard is displayed prominently in the office for transparency and so issues can be found early. It was so successful it earned them a Groundbreaker awards from Procore Technologies.
“It’s all about simplification,” explained ETRO’s strategic initiatives manager Karina Delcourt. “ETRO has an enormous amount of data.”
She has a myriad of projects underway to streamline systems and connect the team.
“We need to reduce the amount of work we do to get a project done, so can we simplify meetings or the time needed to produce reports by automating it? That’s what we are looking at. We need to grow and scale but there’s a labour shortage so we can’t just hire everyone. So we have to do more with less people.”
The strategy going forward is to execute projects with discipline, attract incredible talent and look at better ways to build.
“Whatever projects others think are too hard or challenging, let’s focus on being the builder of choice for those and focus on supporting our primary client base. We don’t have a business development department. We have amazing relationships that we nurture and treat well. This creates a good pipeline and as we have grown they have allowed us to take on larger projects in that pipeline.”
Key Takeaways:
The short term forecast, particularly for public and civil work, looks strong.
Inflation and long lead times on materials are expected to continue but might ease a bit.
Labour shortages are here to stay as expected.
Sustainability efforts, like electrification and the shift to greener energy sources are fueling projects.
Inflation and recession concerns are likely to impact some parts of the residential sector.
The demand for digitization and data continues to rise.
The Whole Story:
Few could have predicted that Russia would invade Ukraine, Elon Musk would buy Twitter and that inflation would soar in 2022.
While there’s no crystal ball to peer into for hints at how 2023 will go, we did the next best thing and asked as many construction leaders as we could about how they felt going into the new year. Generally, the industry is confident that despite some familiar challenges, the short-term forecast is looking rosy.
Orion Construction – (general contractor)
“We are cautiously optimistic,” said Josh Gaglardi, president of Orion Construction. “We are really hopeful to see some normalization and reduction in construction costs in the next 6-12 months as supply chains normalize a bit and demand for materials comes off a bit.”
He added that regardless of what’s going on in the private market, there is still extremely strong demand for labour and materials in public work.
“Demand will remain high this year so I am not too concerned about having work,” he said. “We have a firm footing to know where we are at and we can put together a strong gameplan.”
In 2022, Gaglardi saw the stickiness of ESG and believes in the coming year and years after that, the industry could see those trickle down effects from investors.
“In 2023 we have a handful of net-zero projects that we wouldn’t have had in years prior,” said Gaglardi. “We will see more solar panels, more sustainable initiatives, more consultation with First Nations groups for sure.”
Alltrade Industrial Contractors – (industrial)
Electrification is here and it’s poised to create shockwaves.
Kevin Ritzmann, senior director for Alltrade Industrial Contractors, said grid electrification will continue to increase both for new power generation with increased demand and for electric vehicle mandates across the country. He believes this will drive new investment in renewables across Canada and increase investment in provinces that are currently building renewables heavily – like Alberta, Saskatchewan, Quebec, and Ontario. This could also be bolstered by federal incentives which could slice the cost of renewable energy projects down.
“What’s interesting is we thought in Ontario that we had enough power but it looks like there is more demand and with Pickering Nuclear coming down, we need more investment in power generation,” said Ritzmann.
He added that major car manufacturers are anticipating EV regulations and investing big in new or renovated facilities.
2023 will also see continued investment in major transit infrastructure projects across Ontario, Quebec, and Alberta. And as new projects enter into design phases there will be a pipeline of future work across Canada (Ontario Line, Eglinton Crosstown West Extension, GO Regional Express Rail, Calgary Green Line LRT).
Alltrade continues to see shortages of tradespeople and long lead times on materials, making one’s planning and partners more important than ever. He doesn’t expect these challenges to ease significantly in the coming year. He noted that the U.S. is experiencing similar project booms and is also competing for talent and materials.
“We were seeing power transformers go from ten months to a year and half to as high as two years,” he said. “That’s a huge lead time.”
Naikoon Contracting – (homebuilding)
Josef Geluch, president of Naikoon Contracting, believes there may be some sunny skies before the storm.
“We are confident in our construction market and I feel that we are starting to see some indicators of settling for some of those supply chain issues,” he said. “It’s going to be very interesting and I will be on the edge of my seat to see how the year unfolds.”
However the later part of the year and going into 2024 could be rough for some parts of the sector, like low density housing. He said watching leading indicators like architectural work and build permit application volumes will be key to see into the future.
“2024 looks a bit concerning, but we are lucky to be in Vancouver as we have a bit of insulation here compared to the rest of North America,” said Geluch. “Everything is still firing on all cylinders for active construction. We are still building out a backlog from two, three, four years ago.”
He also highlighted the issue of municipal processing times as something that should be addressed.
“Bottlenecks and bureaucracy cause problems and it takes years and years to get a project off the ground,” he said. “There have been ambitious statements made by cities and the province to fix this. If that is possible, I don’t know, but it would be timely to do so. It might save us in subsequent years where the market might be soft.”
On the tech side, Geluch believes the industry is in the midst of its most exciting decade ever as digitization tools like BIM and VDC are becoming more widely adopted.
“It can allow you to see into the future more tangibly,” he said. “Leveraging digital assets into value propositions is gonna grow and be huge. It will change the way projects are managed. It’s nothing new but people have begun to figure out its true implementation.”
COWI Canada – (consulting)
Jesse Unke, vice president of COWI in Canada, believes that finding and retaining people will be the biggest issue.
“Going into 2023, I think a lot of my concern on the engineering side is finding and retaining people,” he said. “I think it is still a big concern for myself and my colleagues and people in the industry. If you are in consulting, law, contracting or anything that touches construction, retaining and attracting new staff is going to continue to be a challenge.”
He added that it’s no longer just a simple formula of compensation or opportunity that people are looking for. Company culture, and approaches to EDI, sustainability, remote working and technology are some factors that are retaining and attracting staff.
“Also, in the back of my mind is if we are really through COVID. Is there going to be another wave?” he said, noting that getting back to in-person, face-to-face meetings has been great for the industry in terms of building relationships and trust. “I would hate to see that taken away from us, but if that happens, we obviously have to do our due diligence to keep our staff safe.”
Unke said supply chains and material costs continue to be a big issue, especially on infrastructure projects. The long lead times and unseen costs negatively impact schedule and costs.
“Whether it’s vertical or linear construction, it can really hold things up,” he said. “A good example would be climate resiliency work. You can put all the infrastructure in place, but without a critical piece of the project like a pump, you’re out of luck. These are similar things we were concerned about in 2022 and it’s carrying over.”
He noted that inflation could cause some projects to get shelved or cut back as borrowing power for private clients isn’t as strong.
On the tech side, increased innovation in technology and digitalization – especially in engineering – such as the transition to and utilization of BIM from traditional CAD, is changing the way business is done.
Gensler – (design)
Steven Paynter, principal at Gensler’s Toronto office, explained that following a pandemic-fueled course correction, the real estate industry continues to face transformational shifts in how buildings will be designed and used.
“Amid high uncertainty, many of our clients are now focusing on strategic, asset-level decision-making,” he said. “We’ve seen the conversation about office to residential conversions move from the fringes to the mainstream in 2022, and I’m confident that will continue to be a hot topic into 2023.”
According to Paynter, in times of uncertainty, quality really reigns supreme.
“We’ll see winners and losers in the different sectors as well as a heightened bifurcation between high quality and low quality assets,” he said. “This trend continues to drive the demand for architects to come to the table as strategic partners to help their clients reposition stranded assets and create places that really lead with experience.”
Pitt Meadows Plumbing and Mechanical Systems – (mechanical)
“We’re probably suffering through all the current industry-wide problems that everybody has been verbalizing,” he said, listing supply chains, pricing challenges and finding adequate labour as the usual suspects.
“Looking forward, we think the coming year will be significantly better for us from a revenue perspective,” he said. “We have a significant amount of work booked already and we will continue to leverage benefits of off-site construction to ensure that the labour challenges as well as supply challenges don’t affect our productivity or ability to turn your project over to you in the timeframe we told you we would.”
Robinson noted that the company has used unique strategies in the past year that allowed it to continue to optimize its jump into industrialized construction including the purchase of WQC Mechanical.
“We will continue to do synergies similar to that in the future,” said Robinson.
He added that they will also continue to leverage extreme planning and moving as much labour off a job site into their shop environment.
“If you’d talked to us four or five months ago, we saw significant evidence and the traditional pointers for a significant or minimal slowdown,” he said. “But you can’t really have a recession without significant unemployment. It’s as simple as that. And until we start to see significant unemployment, I don’t believe you will see any significant recession of any kind.”
He noted that there are significant initiatives from the province and federal government to build large amounts of homes and improve infrastructure, and immigration targets are set to expand.
“The slowdown in construction is probably over-reported and may never actually come to fruition anytime in the short term,” he said. “For sophisticated construction service purchasers who understand the value of time and money and whose expectations are high, we will continue to be their provider of choice.”
Procore – (technology)
“Looking ahead to 2023, I expect a year of challenge and change as the Canadian construction industry grapples with ongoing problems such as the labour shortage while continuing to move toward integrated project delivery to achieve greater efficiency,” said Jas Saraw, Procore’s vice president in Canada. “At Procore, we are watching adoption of on-site technologies such as drones and augmented reality with interest, while we also expect further developments in project tools that improve the connection from the field to the back office, and offer predictive insights in order to further drive project efficiency.”
Saraw added that as labour, supply chain and financial constraints put pressure on the industry, there will be accelerated adoption of integrated project delivery to improve efficiency, streamline collaboration between stakeholders and minimize waste.
As the industry continues to digitize, Saraw believes data will become more and more powerful.
“With more contractors moving project information from paper to the cloud, it will be increasingly possible to draw insights from historical data to inform decisions about budgets, scheduling and other aspects of construction,” they said. “AI (Artificial Intelligence) and ML (Machine Learning), will take the complex data and voluminous data that is collected on jobsites and start to make sense of the data in order to drive predictive insights that will allow all project stakeholders to make more effective decisions earlier in the design and build process and ultimately shield themselves from downstream risk as the project schedule progresses.”
505-Junk – (waste/recycling)
Builders want more data – that includes tracking their waste and where it goes.
Barry Hartman, CEO and founder of 505-Junk, said he is seeing an increase in requirements for diversion and an increase in accountability data requested from clients. In the past, data on waste diversion had usually been requested for LEED requirements.
“Those clients can actually view those metrics and know their waste is being kept out of a landfill and they have evidence,” said Hartman.
He attributed this shift partly to the rise of online storytelling through social media.
“What story do construction companies want to tell? Not only is it the right thing to do, it’s a good marketing play as well,” he said.
505 is following this trend by testing out incentives where they will plant trees on their client’s behalf if more waste is diverted from landfills.
505 has also found the density of Metro Vancouver and the number of projects have made it challenging to place bins on site. Hartman is finding the demand for live loading is increasing to a point where using cranes to empty self-dumping bins is becoming common.
The future of technology and energy requires critical minerals and Canada has released its plan to secure them.
This month, the federal government released the Canadian Critical Minerals Strategy, a plan to establish and maintain resilient critical minerals value chains that adhere to the high ESG standards.
“There is no energy transition without critical minerals: no batteries, no electric cars, no wind turbines and no solar panels,” wrote Jonathan Wilkinson, minister of natural resources. “The sun provides raw energy, but electricity flows through copper. Wind turbines need manganese, platinum and rare earth magnets. Nuclear power requires uranium. Electric vehicles require batteries made with lithium, cobalt and nickel and magnets. Indium and tellurium are integral to solar panel manufacturing.”
Canada is also in a unique global position. It is home to almost half of the world’s publicly listed mining and mineral exploration companies, with a presence in more than 100 countries and a combined market capitalization of $520 billion.
The strategy, backed by nearly $4 billion in Budget 2022, envisions Canada as a global supplier of choice for critical minerals.
But what does the strategy mean for builders? Here are five major takeaways:
1. We have to get better at finding minerals
Locating critical minerals in Canada’s vast landmass is a complex endeavor. It requires advanced geoscience capabilities, including geological mapping, geophysical surveying, and scientific assessments and data.
Ottawa plans to spend $79.2 million for public geoscience and exploration to better identify and assess mineral deposits. They also want to offer a 30 per cent Critical Mineral Exploration Tax Credit for targeted critical minerals. $47.7 million will be spent on targeted upstream critical mineral R&D through Canada’s research labs and $144.4 million will go towards critical mineral research and development, and the deployment of technologies and materials to support critical mineral development for upstream and midstream segments of the value chain.
2. Projects need to speed up
It takes anywhere from 5 to 25 years for a mining project to become operational, with no revenue until production starts. The federal government says that’s not good enough so they are looking to accelerate the development of strategic projects.
Ottawa is pouring $1.5 billion into the Strategic Innovation Fund (SIF), one of the most significant direct funding mechanisms in the entire strategy. Officials say the SIF will help build world-class critical mineral value chains in which prefabrication and manufacturing activities are done domestically by default. It will support projects that decrease or remove reliance on foreign critical mineral inputs across a range of priority industrial sectors or technologies. SIF investments will favour critical mineral development opportunities that aim to reduce GHG emissions in critical mineral and manufacturing sectors.
Officials also plan to spend $21.5 million to support the Critical Minerals Centre of Excellence (CMCE) to develop federal policies and programs on critical minerals and to assist project developers in navigating regulatory processes and federal support measures.
A map shows areas of potential mineral project development. – Government of Canada
3. Sites need to be accessible and supported
Critical mineral deposits are often located in remote areas with challenging terrain and limited access to enabling infrastructure such as roads or grid connectivity. Officials say the cost implications of this infrastructure deficit discourage investment and hinder the socio-economic development of local communities that welcome mineral development. It also increases the risks associated with economic and logistical feasibility, particularly with rising inflationary pressures and challenges in global supply chains.
Ottawa is proposing $1.5 billion for infrastructure development for critical mineral supply chains, with a focus on priority deposits. They also want to make strategic infrastructure investments in green energy and transportation to unlock critical mineral regions, while also improving environmental performance and driving emissions reductions in existing operations through electrification.
4. A lot more workers are needed
Mining experts anticipate that up to 113,000 new workers will be needed by 2030 to meet new demand and replace those workers anticipated to exit the mining workforce. Sound familiar?
Officials are also looking for partnership opportunities with provinces and territories, Indigenous-led organizations, and several stakeholders, including universities, colleges, and specialized training institutions, to create greater awareness and understanding of the minerals and metals sector, sometimes referred to as mineral literacy. These partnerships would encourage enrolment in mining curriculum, skilled trades, and by socializing the role critical minerals play in the green energy transition and showcasing the diversity of careers available in the sector.
A diagram show all the minerals Canada has identified as “critical”. – Government of Canada
5. Indigenous people must be included
Indigenous peoples are the stewards, rights holders, and in many cases, title holders to the land upon which mineral resources are located. Historically, Indigenous peoples have not always benefited from natural resource development on their traditional territories, and some developments have caused adverse environmental and social impacts on communities.
But federal officials say that in the past few decades, Indigenous participation in the mining sector has grown significantly.
Ottawa is allocating $103.4 million to advance economic reconciliation through enhanced readiness to meaningfully participate in the natural resource sector, including at least $25 million to support Indigenous participation and early engagement in the strategy. Funding is available through the Indigenous Natural Resource Partnerships Program, which funds activities that help increase the economic participation of Indigenous peoples in natural resource projects. The Program is accessible to Indigenous communities, businesses, and organizations.
It all started with joists.
About a year and a half ago Josh Gaglardi, president of Orion Construction, saw that the lead time for ordering joists had jumped from an average of 8-12 weeks to as much as 24.
“That was the first canary in the coal mine,” said Gaglardi. “Now a lot of other items are hard to get: breakers, distribution equipment for electrical work, packaged HVAC units. The list is getting longer and longer.”
Shifting schedules around
Timelines for some parts are as long as six months. Roughly a year ago, Orion began strategizing ways to get ahead of these setbacks and lead times. They asked clients to hedge on inflation and costs to secure product for their project. Procurement, engineering and detailed design were pushed ahead of schedule so materials could be ordered earlier. Orion then stored these materials on site or in a warehouse.
“That was our major mitigating strategy to hedge against inflationary pricing increases and long lead times and we had a lot of success with that on projects,” said Gaglardi. “It definitely impacted our corporate strategy and has caused us to be more creative in our approach.”
The B.C.-based construction company has now found itself regularly warning clients that there may be supply chain issues in schedules.
“At the beginning it was tough because nobody understood what was happening,” said Gaglardi. “It was a new problem for a lot of people and it took a lot to explain. But the media publicized it so it got easier and easier. People knew before I even had to tell them.”
Gaglardi has been in construction for roughly 20 years and has never seen supply chain issues like today. The only other issue of note was six years ago when a steel tariff dispute with the U.S. caused prices to spike.
“That affected us and it is comparable but not the same magnitude,” said Gaglardi. “You look around now and it’s a new thing every day.”
Despite these challenges, Gaglardi remains optimistic.
“I think there won’t be as much general opportunity because the economy is slowing, you can definitely feel that and read that too,” he said. “But I think we are forced to be optimistic in the business. There will be opportunities in 2023. The building industry will still exist.
Stockpiling materials
In Alberta, the Calgary Construction Association (CCA) attempted to create a living document of specific supply chain issues in the region to assist builders, but the problem became too difficult to keep up with.
“Frankly things got so volatile, so unpredictable, so multifaceted,” said Bill Black, CCA president. “Every 48 hours something else was going on. It was too much of a moving target. At the same time the industry in its own form had already started to adapt and work around things.”
Black said companies who had the capacity to do so began stockpiling key items.
“Rather than ordering by the project, they were carrying inventory at their own cost – the kind of stuff you would use on every job,” said Black.
A loaded train cuts through Canada. – CN Rail
These included common kinds of wiring and commonly used rooftop HVAC units. These units even recently have seen lead times as high as 52 weeks.
“The benefit is they have an inventory that allows them to create predictable schedules and charge whatever the market rate is which probably covers carrying costs,” said Black. “However, you have to have the cash flows that support that and potentially a bank that understands that you have had to shift to this static inventory model.”
However Black noted that this has likely hampered smaller companies’ ability to hold the price as they aren’t able to place orders and stock products for extended periods of time. But he believes the larger problem has been higher up the chain.
Unreasonable owners not helping
“Not all owners have been willing to accept the reality of this and are not willing to pay for products or materials ordered early, or not willing to pay for stuff that hasn’t been installed,” said Black. “They were already doing that before supply chain issues.”
He noted that public owners have been worse than private ones.
“They just seem to think they are allowed to demand the untenable and they seem to believe the industry is so desperate that there is an endless supply of companies willing to bend to them,” said Black. “The challenge is that some people might be willing to take the risk and it might backfire.”
He believes it’s likely that private owners often have people internally who understand the construction industry and have more respect for what’s going on and how they can contribute to the solution.
“When it comes to public owners we see less and less people at municipalities and with the province that actually know the industry to any level of detail and have bureaucratic rules that have created an arms-length relationship between them and industry,” said Black.
Black said the result is more and more companies pulling back from working with these entities who he says have an unrealistic attitude around the level of risk that should be borne by Alberta builders.
“Not all owners are willing to accept the reality of this.”
Bill Black – Calgary Construction Association
Black expects the supply chain issues to persist for several more years.
“I think they will settle down, and by settling down I think lead times will become more predictable and reliable, but I don’t think they will ever be as fast as they used to be. I think prices will stabilize but I don’t think they will be back to where they were.”
He noted that one way to stabilize the chain is to bring the source of products closer in areas that are more politically stable. But overseas products are often much cheaper.
“I think you will see a number of companies near-shoring and moving manufacturing,” he said, noting that this cuts down on risk and also one’s carbon footprint.
Canada working on national supply chain strategy
Supply chain issues have become such a national issue that they caught the eye of Ottawa.
This fall the National Supply Chain Task Force, which was formed by Transport Minister Omar Alghabra in the wake of the COVID-19 pandemic, released its final report. The task force wrote that a common theme they found was the struggle of both government and industry to cope with uncertainties arising due to critical factors such as rapidly changing trade patterns, human- and climate-caused disruptions, shifting geopolitical risk, and increased consolidation in major transportation modes.
“As a medium-sized player in the global market, Canada is finding it difficult to overcome these challenges, which have exposed and exacerbated longstanding weaknesses in the Canadian transportation supply chain,” the report said.
Highlights of recommended actions in the report include:
Easing port congestion.
Addressing labour shortages and employee retention.
Establishing a federal Supply Chain Office to unify relevant federal government activities.
Protecting corridors, border crossings, and gateways from disruption.
Developing a national transportation Supply Chain Strategy.
Engaging the U.S. and the provinces and territories to achieve mutual recognition of regulations, policies and processes.
The Government of Canada stated that it plans to develop a national supply chain strategy informed by report’s recommendations
What exactly is a supply chain?
Gregory Paradis is a forest industry expert who uses mathematics and computers to model interactions between forest ecosystems, industrial supply chains, governments and society.
He described the supply chain as a network where you need uninterrupted flows – from wherever they are coming from to wherever they are going.
“Think of it as an electrical grid, or network of connected machines, or a network of pipes that form a water system. All those networks are basically made up of arcs and nodes,” said Paradis. “Nodes are where things converge and flow. Arcs are where you travel. It’s things flowing from one place to another.”
He explained that when you have a large commodity market that’s driven by the lowest price, which characterizes construction, you end up with large suppliers that have a lion’s share of a very specific product.
Global commodity markets often trend towards hyper specialization and efficiency, which can leave little breathing room for when something catastrophic happens.
“With commodities you have these globalized markets and people from anywhere can push their product onto the market. If everyone is competing on price, what happens is people are outbidding each other to the point where they can’t bid any lower because price bumps into cost,” said Paradis. “When people start to play that game where the commodity hits the lowest price – where it’s cost plus a dangerously small margin – if they can get it a penny or two less per unit than anyone else, they become the biggest supplier and get the volume.”
Lumber is loaded for export. – Province of B.C.
This happened to Canada’s lumber industry in the 1980s. Competition for generic dimensional lumber went global. This forced out smaller, flexible sawmills for large, specialized ones that could produce a very limited kind of product in massive quantities for cheap.
“Manufacturers that produce smaller volumes of higher diversity products cannot possibly match the unit price of someone that does one product in huge quantities,” said Paradis. “It’s the laws of economics. Economies of scale apply when you have fixed costs.”
How the chain gets broken
But to maintain their competitive advantage, these facilities have to operate at or near full capacity or they will lose their economic advantage and shut down or go bankrupt.
“Like a drag racer, it’s good at drag racing, but bad at everything else,” he said. “But if any of these places go offline or get disrupted, then you have an interruption in the flow. People look for alternative suppliers who either don’t exist or can’t absorb the demand.”
This is exactly what happened during the COVID-19 pandemic. Large facilities struggled to remain open due people being sick or in lockdown. The supply was squeezed, demand went up and so did prices. And nobody had stock saved up somewhere because storing large amounts of materials is expensive.
“If we had built a larger number of medium mills designed for flexibility and agility to run at 40 or 50 per cent instead of 80 per cent, then we would have fewer disruptions but higher prices,” he said. “What you saw during COVID was not altogether surprising.”
Even beginning to approach the issue of supply chains is immensely complex. Paradis said that just the wood product supply chain is made up of governments, resource extractors, product manufacturers, wholesalers, retail sellers, customers, builders, customers and more.
“All the different actors in the system are not working under a single emperor dictating how we feel and what our goals are. It is a highly decentralized and distributed system with distributed decision making,” he said. “Nobody got up one day and decided to build a supply chain. They just kind of happened for the most part.”
And even if one could get all these stakeholders into a room, coming up with solutions to supply chain disruptions gets even more complicated as the number of impacted stakeholders expands and unintended consequences can pile up.
Using computer modeling to improve the chain
Despite these challenges, there can be some success. Paradis has done extensive work with FORAC, a research consortium of forest products industry stakeholders.
“Everything they do is basically taking the forest industry’s supply chain and using math to try and find efficiency, resilience and flexibility,” said Paradis.
In more than 90 per cent of FORAC’s research projects, collaboration is identified as a way to improve supply chains.
FORAC found this to be true in work they did with the Swedish logging industry. Crews would harvest logs and then truck them to mills to turn into lumber. The companies coexisted in the same region where sometimes fully loaded rival company trucks would pass each other.
“That’s guaranteed inefficient nonsense. You are moving the same product in opposite directions. That whole chunk of road is a wasted trip,” said Paradis.
FORAC did complex modeling to figure out that if they could capture where the mill supply zones intersect, they could swap loads at the board instead of passing, decreasing everyone’s transportation costs. However, some would benefit more than others, which made for lots of negotiations. But eventually a deal was struck.
How chaos theory could help change it all
But Paradis wants to think bigger. A lot bigger. He’s begun to think about what a future, sustainable supply chain could look like and the effort that would take to get there.
It starts by understanding a bit about chaos theory.
“Chaos is not pure randomness. Chaotic systems are systems where 100 per cent of their behaviour can be explained with a set of rules, but chaotic systems are usually very complex. They seem to be mysterious, random black boxes,” he said.
An example of this is an ecosystem. Scientists don’t know how they entire system works but they seem to self-replicate and persist on their own.
“Supply chains and other systems like the forestry sector are systems so complex that they behave in ways we cannot fully explain or understand,” said Paradis.
But chaotic systems have an attribute called “strange attractor” where the system is orbiting around a current state and it is attracted back into itself.
“A strange attractor will keep being that thing until something nudges the system,” said Paradis. “Supply chains will keep doing what they do until nudged hard enough to skip over into the next puddle over. But once you get there, some of these systems are self replicating. It’s just getting there that is hard.”
Paradis believes that the apocalyptic threat of climate change could be a motivating force strong enough to nudge these systems into something better. He is currently working with the mining sector where many of the massive companies are self-declaring goals of reaching zero carbon emissions by 2050. But this will be impossible without buying billions in carbon offsets.
“What I am trying to do is get them on board for collaborative projects to design these transformative changes that bump us from one puddle to the next,” said Paradis.
He hopes that this could lead to collaborating on a more sustainable solution and provide a way to fund the shift.
“You have to have this grassroots groundswell where shareholders who control companies say we need this and this is why mining companies are declaring net zero goals. It’s what their shareholders want. The climate emergency may provide some of the catalyst necessary to achieve more sustainable supply chains.”
Key Takeaways:
Despite great efforts to grow the workforce, demand continues to outpace labour supply.
Recruiters have developed new digital tools to try and connect workers with employers, but face-to-face relationship building remains critical.
Contractors believe there needs to be a massive societal shift towards respecting trades careers and educating young people about the benefits the industry has.
SiteNews spoke with contractors, academics, labour experts and recruiters to understand what is happening with Canada’s skilled labour shortage and where it’s headed.
The Whole Story:
The dark shadow of workforce shortages has long been looming over the Canadian construction sector. Now that it has hit, has it really been as dark as they said it would be? Is the construction sector finding ways to cope? What are experts doing to address the shortage? We spoke with labour experts, economists, recruiters and contractors to get their thoughts on the current state of things and what they think the solutions could be.
Demographic challenges continue
Times are tough but they are going to get tougher, say construction labour experts.
While few could predict that the COVID-19 pandemic would throw the sector into a new level of uncertainty, many believe it has accelerated trends that were already underway.
BuildForce Canada’s latest report and forecast explained that as Canada’s economy began to rebound in 2021, older workers were slow to come back.
“If you look at the overall census data, 19 per cent of the population is over 65 and 20 per cent is between 50 and 64,” explained Bill Ferreira, BuildForce executive director. “And those under 16 only account for 16 per cent of the population. We have a demographic crunch. This is what we have been saying for ten years. The challenge the industry faces is not just an industry challenge, it’s a country-wide challenge. The population is getting older and not enough young people are not coming in adequately enough to meet the needs of the economy. More people are set to retire in the next 15 years than we can replace.”
Unlike the Great Recession, when younger workers were let go first and took longer to return to pre-recession levels of employment, the pandemic caused some older workers in the core working-age group to leave the labour force, many of whom have been slow to return as emergency measures were lifted.
BuildForce found that this caused a tightening of labour markets for most parts of the country and shoved unemployment rates lower as employment outpaced labour force growth for most of the year.
In addition, last year also saw a construction boom with total year-over-year construction investment rising 11 per cent.
Construction investment is essentially sustained into 2023 and then declines gradually over BuildForce’s six-year forecast period. The group expects total investment to be approximately 1 per cent lower by 2027 than levels posted in 2021.
Shortages likely to get worse
“In my opinion, the situation is likely to get even more challenging for the industry as it shifts into the mix of projects we are building,” said Ferreira. “When you look at the requirements for meeting some of the goals – admittedly aspirational goals – of government to double new homes over the next ten years, reduce greenhouse gas emissions for existing buildings, all that will require a shift in the workforce. This is particularly true for renovations to get existing buildings down to net zero. Requirements will increase. While technology will play some role and mitigate some challenges, it’s unlikely to mitigate all of those challenges. The requirements for labour are likely to increase, not decrease.”
The group estimates that construction demands will require the industry’s labour force to find 15,900 workers over the forecast period. When this demand growth is added to the 156,000 individuals expected to retire during this period – in total, approximately 13 per cent of the 2021 labour force – the overall industry recruitment requirement rises to 171,850 workers by 2027. BuildForce data shows that while the industry is expected to recruit approximately 142,850 new-entrant workers under the age of 30 during this period to help offset some of this requirement, even at these heightened levels of recruitment, the industry is likely to be short some 29,000 workers by 2027.
A chart shows some of the key labour indicators sourced directly from Statistics Canada. – BuildForce Canada
Ferreira noted that the federal government has introduced new supports for employers to help with costs and barriers to taking on apprentices. There are also programs that the government is looking at implementing to provide more incentives to those looking for new careers to choose essential industries like construction.
“The government is certainly doing its part in terms of helping employers recruit job seekers and young people,” said Ferreira. “Premiers have started to engage the federal government around immigration policy to see if there are reforms that could increase skilled trade workers coming into the industry. The federal government certainly seems open to these discussions.”
The issue is economy wide. Ferreira noted that the national unemployment rate is slightly above 5 per cent.
“When I was in my 30s, unemployment was 9 or 10 per cent,” he said. “To have 5 per cent is really unheard of. July was the lowest unemployment ever recorded since they started keeping track in 1976.”
The result has been some reluctance to bid on projects out of fear the labour won’t be available.
“This doesn’t mean projects won’t go forward,” said Ferreira. “They just maybe won’t go forward as quickly. The workforce is working harder today than ever before and employers are doing their very best to keep pace but the demands are outstripping the ability of the labour force.”
“We have 740 employees at the company,” said Tim Coldwell, president of Chandos Construction. “If we could, I would hire 100 carpenters and labourers tomorrow and put them to work. The supply is not there.”
The company is also facing similar challenges for project managers, estimators, site superintendents and other roles that are often filled by those who start their careers in the trades. Coldwell believes part of the solution begins with a major perception change around the trades.
“Frankly, new grads coming out of high school are more interested in working for Google or Microsoft than for construction projects,” said Coldwell. “ The industry has this challenge around being seen as cold, dirty and messy. There’s a whole other side to that conversation.”
Chandos workers inspect a site. – Chandos Construction
The shortage has pushed Chandos to be strategic about the jobs it takes and how much it takes to ensure its labour force is not overextended.
“The solution is kids,” said Coldwell. “You have to get to kids. It’s not good enough to get kids in high school.”
Coldwell explained that one of the big things that started the decline of trades careers was in the 1990s they took shop class out of most high schools in Canada and the U.S.
“That’s gone,” said Coldwell. “I think we need to get back to letting kids know about the virtues of trades work.”
Teaching children modern construction
He noted that research suggests children form their opinions about who they want to be and what they want to do when they are 6-10 years old.
“What you really need to do is get into the curriculum taught in schools for ages 6-10 and talk about construction and those careers being a good thing,” he said.
Provinces like Ontario are already doing this by introducing construction concepts to grade three students.
“When’s the last time you talked to a 13 year old who was excited about being a plumber or electrician or a parent that was excited about them doing that,” said Coldwell. “There are societal challenges that underpin this.”
Coldwell hopes that the new generations of youth understand that construction is a sector that uses tablets, 3D modeling, exoskeletons, robotics, AI and other cutting edge technology.
“The industry is transforming very quickly and the future of construction work will be less about shoveling in a pit and more about organizing tools and equipment, and thinking with your brain about how to use those supports on job sites,” he said. “I think kids particularly don’t know about that. They think they will be shoveling at the bottom of a trench in a snowstorm.”
He also wants young people to understand the financial security construction work can bring. A red seal carpenter in Toronto can make roughly 48 bucks an hour.
“That’s $100,000 a year,” he said. “With overtime it could be $120,000. If you start a trades program when you are 16 you could be pulling that when you are 20.”
There is also lots of opportunity for entrepreneurship. Coldwell noted that many tradespeople can start contracting businesses and make even more money.
Part of Chandos’ current strategy has been to target underrepresented groups like women and Indigenous people. They also are open to giving opportunities to struggling young people.
“If we could, I would hire 100 carpenters and labourers tomorrow and put them to work. The supply is not there.”
Tim Coldwell, Chandos Construction President
This is something Coldwell is passionate about, as he was once a 17-year-old heading down a dark path.
“I self-identified as an at-risk youth,” he said. “I was going to be in a cardboard box on the street. I found my second family and purpose in construction.”
Coldwell was hired by Chandos Construction where he now serves the president.
“If you give someone a chance, positive role models and a career that can pay $100,000 a year, so many kids would love that opportunity,” he said. “They are loyal and thankful and come to work happy and engaged. That flows to increased productivity and it’s a win all around.”
Recruiters adjust to assist employers
Workforce recruiters are becoming more sought after to help organizations fill construction positions.
Michael Scott, vice president of Impact Recruitment’s building division, explained how employee sourcing has evolved in the construction sector and what companies must do to compete for labour.
“It’s nothing new,” he said. “When I started this division 10 years ago we were just coming out of the global financial crisis, right when Vancouver construction was about to rebound properly. There was a labour crunch then.”
However, Scott explained that the past decade, construction has grown it to a far more prominent career as issues like affordable housing are at the forefront in people’s minds. “Construction and development is now an industry that seems more viable – not just the trades. It’s purposeful,” he said.
While the world has changed in many ways over the past decade, some things remain the same.
“Technology is part of it, but when it comes down to it as a recruitment partner, construction still lives on shaking hands, meeting face to face and getting a gauge of who someone is – whether that’s a carpenter, labourer, electrical, mechanic, project manager or site superintendent,” explained Scott. “When we started the division ten years ago, we made a point of always meeting the person. That hasn’t changed.”
New technology and the COVID-19 pandemic has pushed the industry to become more familiar with digital tools like video calling. Scott says this allows recruiters to cast their net further and digitally meet more candidates. This also helps recruiters encourage clients to meet with candidates from other provinces.
Not all roles have been equally difficult to fill.
“Difficult roles to fill have been high expertise jobs like estimators and superintendents because most organizations would like to see a super who has built what that company builds. Looking for that super who’s built it from start to finish, from excavation on the ground to completion and handover is very difficult,” said Scott. “Other positions are senior project managers because if you are good at that, your organization is holding on to you and you are being fully utilized. It takes a while to get these people up the ranks. The other big one is just labour in general.”
This has led to many workers often getting multiple offers and then counter-offers when job hunting.
New tool aims to connect workers and companies
The rise in demand for recruiting assistance led to Impact creating AmbiMi, a skills-based job matching platform that combines an app with a human-centric network of job hubs to support job hunting and hiring. The technology helps filter and vet qualified candidates based on verified skills, while streamlining processes used in the traditional temporary recruitment agency model.
“We wanted to create a digital platform where workers have more direct access to employers,” said Scott. “We looked at it as a way for upward mobility of humankind, giving everyone the opportunity to upgrade their skill set.”
The tool has been released digitally in B.C. and will soon be available in Ontario. In the last few months the team has also begun setting up brick and mortar job hubs in B.C. and Ontario.
Scott encouraged employers who are searching for workers to have an open mind about someone’s background. While they may not have the exact experience you want, their experience may still be beneficial. He also stressed that interviews are critical, as it’s common for workers to get multiple offers.
“When you interview, give them the ultimate respect,” he said. “They made time to speak with you as an employer.”
He noted that even if that person is not a good fit, it is still important to keep them in your network for future opportunities.
Recent tightness demand-related
Some academics believe the recent labour crisis spike is more than demographics and the struggle it causes could be better for the industry in the long run.
“My reading of the data is that the overwhelming market tightness is not a slow moving demographic trend, that’s part of it, but it’s mostly something that appears to be the effect of the pandemic,” said Mikal Skuterud, economics professor at the University of Waterloo and director for the Canadian Labour Economics Forum. “And it appears to be driven primarily by the demand side of labour markets and not supply. The aging population and people moving to retire – that is happening – but we’ve seen a massive spike in tightness.”
Skuterud explained that the spike began in 2021 when the number of job seekers remained barely moved but the number of vacancies shot up. Skuterud, believes at least one factor lies in the pandemic relief that flooded business.
A chart by economist Mikal Skuterud shows a recent major spike in job vacancies. – Mikal Skuterud
“Business failure rates were down,” he said. “The government threw more than $100 billion into the wage subsidy program and more through the rental subsidy.”
Skuterud noted that the Canada Emergency Wage Subsidy was more than the Canada Emergency Response Benefit and Canada Recovery Benefit combined.
“There were lots of businesses that even without the pandemic, would have failed,” he said. “These are zombie businesses with razor thin margins, barely getting by. This caused lots of ‘labour hoarding’, as we call it, through this period.”
He noted that there is also just simply a lot of demand for things being produced by Canadian businesses which is reflected in consumer prices and inflation.
When zooming in specifically to construction, Skuterud said job vacancies have always been high, reflecting the transitory nature of the workforce as people move in and out of jobs fast. During the pandemic, construction saw high vacancy rates but was not hit as hard as other sectors, like food and accommodation.
Shortages could be healthier in the long-term
To address construction workforce shortages, Skuterud says immigration is a policy option many in the industry are lobbying for and new government regulations could relax restrictions for temporary foreign workers (TFWs) – an issue that he believes could become a major battleground for trade unions in the future.
He and other colleagues recently wrote a critique of softening restrictions on the TFW program, calling the crunch an opportunity for workers to get better wages and conditions, and employers to innovate.
“There is much to be said for letting these labour shortages play out,” he said. “When there is high unemployment we try to train workers and encourage them to compete for scarce jobs. When the tables are reversed and it’s not the jobs that are scarce, why don’t we force employers to be more competitive by making the jobs better?”
Skuterud said there is little incentive for innovation when one can access low-wage TFWs.
“One issue in construction is there isn’t a lot of oversight and if labour standards aren’t being met TFWs are ideal. Ultimately they want permanent residency and they recognize that to stay on that pathway they shouldn’t ruffle feathers.”
Overall, Skuterud believes that the economic forces of the shortage will boost wages and conditions for workers.
“I am not worried,” he said. “If you can’t survive, you should free up some of your current employees that are not at a profitable company and relocate them to other businesses where they are more productive. That’s a good thing and it’s how competitive economies should work.”
Measuring the crunch
Are the labour problems we face today unique to modern times? Answering that is nearly impossible. Skuterud explained that the way we measure labour tightness is fairly new. Supply side measurements are pretty consistent and go back to the 1970s. But measuring demand was only updated recently.
Modern, comparable demand-side data only goes back to 2015, meaning there are few lessons to be found in the past.
“Until the early 1990s we used to measure labour demand in the ‘Help Wanted’ section,” said Skuterud. “Statistics Canada would literally get newspapers and use big rulers to measure the column inches of job ads. For many years, that was the help wanted index. It’s not at all comparable.”
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