Thank you, Mr. Chair.
On behalf of the more than 17,000 members of the Canadian Construction Association, I want to thank you for providing us with this opportunity to appear before you today and share our views regarding the economy and our recommendations for this year's federal budget.
My name is Dee Miller and I'm chair of the Canadian Construction Association. In my outside world I am vice-president of JJM Construction, based in Delta, British Columbia. We're involved in road building, marine construction, and highway and bridge construction. I'm joined here today by our president from CCA, Michael Atkinson.
With ongoing global economic uncertainty, it's not surprising that construction remains the choice of governments around the world as the best investment for economic stimulus. In Canada, construction accounts for 7% of our nation's GDP and employs over 1.25 million Canadians. We are by far one of Canada's largest economic drivers, and our industry is projected to continue to grow throughout the decade.
A recent report commissioned by PricewaterhouseCoopers forecast that Canada's construction market will become the world's fifth largest over the course of this decade, in part due to strong global demand for Canadian energy and natural resource exports. In short, new infrastructure requirements to support the growing commercial needs of our economy as well as the long overdue renewal of our public infrastructure assets will become the primary driver of construction activity in Canada for the foreseeable future.
Given that infrastructure is critical to the functioning of our economy as it impacts not only productivity but ultimately business profitability, we believe new solutions will be required to help share the tremendous costs associated with the expansion and renewal demands of our nation's infrastructure. One solution to help lower the fiscal burden on governments will likely be public-private partnerships, which is something we have considerable experience at in British Columbia. However, this has drawn to Canada a large number of international firms that carry out much of their engineering and other back office functions in lower-cost countries. Furthermore, these firms often bring with them below market financing that makes it very difficult for Canadian firms to compete within our very own home market. While our industry does not support protectionism, we expect that the federal government, when tendering P3 projects, will ensure that a level playing field exists and that Canadian companies are not disadvantaged.
We're also very concerned about the capacity of cities to continue to fund their share of the infrastructure renewal burden. Since most cities do not have access to growth taxes, the annual transfers they receive from the federal government through the gas tax fund have become instrumental to their capacity to pay for infrastructure renewal. Making this transfer permanent, as outlined in the government's last budget, is an important first step, but unless this transfer is indexed, inflation will erode the effectiveness of this program over time. So our first recommendation is that the federal government index the current gas tax transfer fund to the cost of inflation.
Canada must also ensure that it has an adequate supply of labour. In construction, we expect a shortfall of 325,000 workers by 2019 due to retirements and increased demand for construction across Canada. In a best-case scenario, we expect colleges and other training facilities will help fill approximately half of our new labour requirements, still leaving a shortfall of 150,000 workers. Therefore, going forward, our industry will continue to rely on Canada's immigration system to help fill nearly half of our workforce requirements. However, with chronic processing backlogs within Citizenship and Immigration Canada, our pressing demand for foreign skilled workers will never be realized unless significant new resources are dedicated by Parliament to overcome this challenge. Therefore, CCA recommends that Parliament increase the annual budget to Citizenship and Immigration Canada, so as to permit the department to reduce, if not eliminate, the processing backlogs within the skilled foreign worker program.
Another area of concern for our members is red tape and the cost of regulatory compliance. We are pleased to see the government taking action on this issue, and we look forward to the outcome of the red tape commission's review. One example we used to illustrate our frustration with red tape to the commission is that of security clearances. When a contractor works on a military base for DND, it needs to obtain security clearances for firms and employees. If we decide to work at an airport, we have to go through this entire process again, which makes no sense, since CSIS and the RCMP are responsible for carrying out these reviews.