The Canadian construction industry makes a significant contribution to the Canadian economy as it provides jobs for millions of people. The construction industry is responsible for developing an infrastructure that supports the country’s economic growth, including buildings, roads, bridges and other key structures.
The construction sector is a complex industry, employing people with a wide range of skills and expertise. The Canadian construction sector has experienced significant growth in recent years as the demand for both residential and non-residential construction has increased. However, like most other industries in Canada, it has also faced challenges, most notably the impact of COVID-19 and labour shortages on carrying out construction activities.
In this article, we focus on the key statistics around the construction industry in Canada, including employment figures, contribution to GDP, average salaries within the industry, and predictions for the construction industry’s growth.
Construction Industry Statistics for Canadians
- Total investment in building construction in Canada was worth $20.6 billion in February 2023.
- Building permits were up by 8.6% from January to February.
- The construction industry’s revenue was expected to reach 184 billion in 2022.
- Over 1.5 million people work in the construction industry in Canada.
- In 2022, there were almost 95,000 job openings in the Canadian construction industry.
- The average yearly salary in the construction industry in Canada is almost $46,000.
- Investments in residential construction are expected to decline by over 6% in 2023 because of inflation and rising interest rates.
- The institutional and commercial construction sector has grown at an average rate of 3.9% since 2017.
- The industrial construction sector’s market size was estimated at $11.3 billion in 2022.
Overview of the Construction Industry in Canada
The construction industry plays a vital role in the Canadian economy by developing commercial buildings and private homes to meet the demands of a growing population as well as through non-building construction to maintain a thriving economy. For example, in 2022, there were 252 large infrastructure projects in Canada under development, which were valued at over $33.85 million.
According to Statistics Canada, the total investment in building construction in February 2023 was up by 1% from the previous month and was worth $20.6 billion. Capital expenditures on non-residential construction was valued at $208,780.5 million, and they were up by 3.8% from the previous year. The number of building permits also increased between January and February this year. Their total value was $10.7 billion, and they were up 8.6% in a month.
Construction Industry Revenue and Contribution to Canada’s GDP
Despite challenges created by labour shortages and the availability of materials, the construction industry was expected to grow by 4.4% in 2022 and reach $184,416 billion in revenue. The CAGR is expected to be 4% between 2022 and 2026, with the revenue reaching over $215 billion by 2026.
In December 2022, the construction industry’s contribution to GDP was the third largest in the country at $152 million. The two industries with larger contributions were real estate, including leasing and rental with $267 million, and manufacturing with $193 million.
Employment in the Construction Industry
The construction industry is the fifth biggest employment sector in Canada, employing over 1.5 million people in 2022. The largest sector is the wholesale and retail trade industry with 2.9 million people working in this sector. It is followed by healthcare and social assistance with 2.6 million, professional, scientific, and technical services with 1.79 million, and manufacturing with 1.74 million employees.
Construction Industry Employment Across Canada
Many parts of Canada will see the employment numbers in the construction industry climb higher in the next few years. For example, in Ontario, employment is expected to increase by approximately 3.4% between 2024 and 2028. In Nova Scotia, the projection is for construction sector employment to increase by 2.6% during the same period.
However, these are small increases compared to what is expected to happen in Alberta. The construction industry employment in Alberta is expected to increase by 10.2% in the same four-year period.
Not all provinces are projected to need more workers in the construction sector. It is projected that there will be a decline in construction jobs on Prince Edward Island. The total employment in the construction sector is expected to decrease by 3.3% between 2024 and 2028 in the province.
Construction Industry Labour Shortages in Canada
In recent years, the construction sector, along with many other industries in Canada, has experienced labour shortages. These are caused by the ageing workforce as well as the lack of new workers entering the sector.
According to Statista, the number of construction vacancies was more than twice as high in 2022 compared to 2020 with almost 95,000 job openings. The data from Statistics Canada on labour shortages shows that 49.5% of construction companies experienced problems recruiting compared to 36.9% of all businesses. The highest number of vacancies were among trade workers, helpers, and labourers.
Construction Industry Pay in Canada
According to the recruitment website Talent, the average annual salary in the construction industry in Canada is $45,817 per year or $23,50 per hour. However, the pay will vary depending on the specific role, years of experience, and area.
The highest average salaries are found in Nunavut, Northwest Territories, and British Columbia. In Nunavut, construction workers earn on average $78,969 per year, in Northwest Territories the average salary is $67,275, and in British Columbia it is $63,378.
There are also big salary differences between different jobs within the industry. For example, construction labourers in Canada have an average salary of $43,988 per year according to Indeed. A bricklayer can earn around $64,573 per year, a plumber $67,725, and an electrician $73,495 per year.
Boilermakers and safety managers get paid some of the highest salaries in the construction sector. Boilermakers, with an average yearly salary of $101,009, are specialized in the manufacturing, installation, and maintenance of boilers, tanks, and similar equipment.
Safety managers, who can earn on average $106,597 in a year, develop and implement a range of safety procedures and rules at construction sites to ensure a safe working environment and prevent injuries and accidents.
The Four Main Construction Sectors in Canada
The construction sector can be divided into four main categories, which are residential, institutional and commercial, industrial, and infrastructure construction.
Residential Construction in Canada
Residential construction, which involves building as well as maintaining and renovating homes, is the most prominent construction category in Canada. The residential category typically includes structures such as single-family homes, apartments, nursing homes, garages, and outbuildings. In addition, it includes the installation, maintenance, and repair of electrical and water utilities in buildings.
The investment in residential construction in Canada increased in 2020 and 2021 by 4.3% and 14.8% in 2021. It is likely that the accelerated growth was at least partially driven by the lifting on COVID-19 restrictions. However, there was a decline of 11.6% in 2022 and the residential construction value is expected to decrease by a further 6.2% in 2023. The main reasons for the lower investments in residential construction are continued inflation and rising interest rates.
Commercial Construction in Canada
Commercial construction, which also includes institutional buildings, is another key sector of the industry and covers buildings such as shopping centres, hospitals, schools, retail stores, and sports arenas. Commercial building constructions, such as retail stores, are mainly commissioned by private companies. Institutional structures, such as schools and hospitals, on the other hand, are paid and supervised by the local or federal government.
In 2021, there were nearly 19 million square feet of commercial spaces under construction in Canada. The commercial and institutional construction sector was worth an estimated $36.5 billion in revenue in 2022. It is a growing sector that has been growing on average at 3.9% per year between 2017 and 2022.
Industrial Construction in Canada
The construction of industrial facilities often requires a more specialized workforce since it involves building and maintaining structures such as power plants and oil refineries. Industrial construction projects are generally undertaken by large industrial for-profit companies.
In 2021, there were over 36 million square feet of industrial spaces under construction, almost twice the amount of commercial spaces. The sector’s market size was estimated to be $11.3 billion in 2022 and the growth rate has been 3.7% per year on average since 2017.
Infrastructure Construction in Canada
This category includes the construction, maintenance, and repair of large-scale structures that are vital for Canadian communities. These include railways, communication networks, roads and highways, bridges and tunnels, and pipelines and drainage systems. Infrastructure construction projects are usually carried out under governmental supervision.
Investments in the Construction Industry
The future growth of the Canadian construction industry is supported by some significant projects, including housing, energy, and transport infrastructure projects. For example, according to Global Data, in 2022, the province of Ontario announced its plan to develop a transportation network. The initial budget for the project is $84.7 billion by 2030.
Another significant project, announced in January 2023, is the investment of $720 million by the Canadian manufacturing company Imperial in the largest renewable diesel facility in Canada, expected to be completed in 2025.
The Federal Government is also committed to delivering financial support worth over $72 billion through the National Housing Strategy by 2027-28. $13.2 billion of that support has been allocated to housing projects for seniors, Indigenous people, and women and children fleeing family violence.
Challenges Facing the Canadian Construction Industry
There are several challenges the Canadian construction industry may need to face in the forthcoming years. However, the biggest challenge at present is to address the labour shortage. If not tackled, it can lead to increased labour costs and delays in delivering projects. Ways to tackle the labour shortage is to attract more young Canadians into construction apprenticeships as well as attracting more skilled workers from abroad.
Another major challenge is the increased cost and availability of materials. Because manufacturing companies are also facing labour shortages and can have difficulties in obtaining raw materials, they are not always producing enough to meet the needs of the growing construction industry. The cost of materials has also risen in Canada due to inflation. This puts pressure on construction companies to maintain quality while keeping the prices in check.
Climate change also poses a challenge to the construction industry. Extreme weather events can not only cause delays to construction projects, but they can also cause significant damage to infrastructure and buildings, which can both lead to increased costs.
In recent years, the Canadian construction industry has faced and continues to face some challenges, such as COVID-19, rising costs of materials, and labour shortages. However, despite these challenges, the industry is predicted to continue growing in revenue and its contribution to the country’s GDP.
The construction industry plays a key role in developing and maintaining Canada’s infrastructure and supporting the nation’s growth. It is also one of the largest employment sectors in Canada and offers good job prospects for new and existing workforce.
Frequently Asked Questions
How many people work in the construction industry in Canada?
The construction industry is one of the biggest employment sectors in Canada, and in 2022, it employed 1.5 million people.
What is the largest sector within the construction industry in Canada?
Residential buildings form the largest sector within the construction industry. In 2021, around 61% of all construction spending was on residential developments.
What does the construction industry in Canada look like in the future?
The construction industry is expected to continue growing in the future, with ongoing and new infrastructure projects and renovations. However, the industry also faces challenges such as rising costs of materials and labour shortages.