Thank you, Mr. Chair.
The Canadian Home Builders' Association represents some 9,000 companies from coast to coast. As such, we are the national voice of the residential construction sector. More than 4,000 of our members reside in Ontario.
I am pleased to be joined today by both the CEO, Joe Vaccaro, and the president of our Ontario Home Builders' Association, Rick Martins, who will also be able to provide you with more insights.
Today, all of Canada faces challenges in meeting requirements for skilled tradespeople in the residential construction industry, and that challenge will increase over the coming decade, as we've heard. This is particularly true in the greater Toronto and Hamilton area.
The challenge is that we are already facing tight labour markets in many regions. Given the aging workforce, our work with BuildForce Canada shows that some 130,000 workers will be retiring from the residential portion of the construction sector over the next decade. The current feeder system of young Canadians and immigration, as we have heard, will not serve to fill those vacancies, so those skills shortages will heighten unless we change the equation.
This situation will require ongoing new construction and extensive renovation of Canada’s existing housing stock, and with it, of course, residential construction workers. It's important to note that the renovation portion of our sector has overtaken new construction in Canada in terms of economic activity; thus even in areas with poor economies and hence less new home construction currently, renovation continues and skilled worker requirements remain.
The challenge is not unique to residential construction. I regularly attend the employment insurance commissioner’s round tables at Employment and Social Development Canada, along with representatives from all employer industries in Canada. From all sectors there is a continual refrain: not enough skilled and, frankly, unskilled labour, and we're all competing for the same undersupplied pool.
Over the past two or three decades, in a drive towards higher education to respond to the knowledge economy, Canada’s education and immigration systems have focused on university education and its career paths. This has led to a shortage in the skilled labour workforce.
In residential construction there is a particular challenge. As we've heard, it's a sector of small businesses with limited training and recruitment capacity. More than 240,000 residential and non-residential building enterprises in Canada are sole proprietorships. Then, of the 142,000 enterprises that have employees, 81%, or 115,000 firms, have fewer than 10 people working for them. Just over 500 firms—thus less than half a per cent—have 200 or more employees. Education, training and recruitment are all challenges for small businesses.
On a positive note, recent fixes to the apprenticeship ratios in Ontario will be helpful for the residential construction industry in the GTHA. At the same time, it is important to note that the sector also employs many skilled workers who are not in apprenticeable trades, so federal programs geared only to apprentices fall short for the construction sector and many other industries.
That’s the challenge. Now, how do we address it?
To address skilled worker shortages all across Canada and in the GTHA, the federal government needs to take a lead role in promoting careers in the skilled trades. We have a cultural “parity of esteem” issue, whereby skilled worker careers are seen as lesser options than university degrees. This needs to change, and there is a federal role in leadership to be filled here. The federal national occupation classification system needs to better reflect residential construction. Also, the federal government needs to support more economic immigration for skilled workers in residential construction.
In general, we need to tweak the immigration system to respond better and more quickly to labour shortages in construction through permanent immigration solutions, as we have been hearing, noting that these skills are transferrable and mobile even, if regional conditions change. We need to adjust the education system to better direct students into skilled worker careers. Also, we need to encourage young Canadians to make construction a career path of choice.
One potential opportunity is to note that the Future Skills Council announced on February 14 did not include the construction industry in its plans. This is unfortunate, as no matter how many other industries evolve in the future, there will be an ongoing need for residential construction, for more skilled workers in this sector and for an evolution of skills and productivity to address workforce shortfalls. CHBA would be happy to work with the government to put together a similar initiative for residential construction.
Last, I would be remiss if I didn’t quickly comment on the very biggest thing having an impact on jobs in this sector: the stress test, compounded with previous mortgage rule changes, which together are now causing an excessive economic slowdown in some regions in residential construction.
It’s important to note that the Bank of Canada has now changed its forecast from the fall, and housing is now forecast to instead be a drag on the economy. Our CHBA member survey showed that 95% of our members blame that on the stress test directly. We are seeing layoffs in our industry in some regions as a result and warnings from members that things will get worse in 2019. This is at a time when the Bank of Canada is stating that it over-estimated the strength of the economy and is now predicting an economic slowdown. Residential construction and skilled worker jobs should be a part of the solution, but right now government policy in this area overshot and is directly responsible for the economic downturn in housing, and hence, the downturn in the economy, which will get worse unless things change.
We need fixes to the stress test and 30-year mortgages for first-time buyers immediately. We need these fixes for young Canadians, for their financial futures, for jobs and for the economy right now and tomorrow.
Thank you.