| Builders facing worker shortage A recent boom in construction has left the industry short of skilled labour, equipment The Globe and Mail, Dec 4, 2000 By Oliver Bertin TORONTO -- The supply of skilled labour is so tight in the Canadian construction industry that developers say they may have to cancel or postpone key projects. "There are lots of red flags on the horizon," said Tony Moro, president and chief executive officer of Toronto-based Deltera Inc. and Tridel Builder's Inc. "The building trades are at capacity. There's no way [the projects] can all be built over the next few years." Even if they are built on schedule, the cost of their construction has already climbed 15 per cent over the past year, with more increases coming as builders compete for labour in a tight market. Jeff Morrison, director of communications for the Canadian Construction Association, estimated that Canada is already short between 25,000 and 60,000 workers, and that will get considerably worse as new projects come on stream. "We need carpenters, general contractors, welders, electricians," he said. "Bricklayers are in short supply." Like other real estate experts, Mr. Moro said the shortage of labour and construction equipment will soon take on serious proportions right across Canada. But the shortage is critical in Toronto. "We'll have to bring in migrant workers from South America," Mr. Moro said. He added that Toronto is so short of equipment that he had to go as far away as Honolulu to find a much-needed crane for a downtown condominium project. Jamie Ziegel, vice-president of investment sales for Toronto-based Royal LePage Commercial Inc., agreed. "There's a shortage of every component [of the construction industry] from labour to cement trucks to cranes. This may mean immigration" of skilled workers from other countries to fill the need in Canada. The shortages of skilled labour and equipment have suddenly become serious because the Canadian building industry has been stagnant for nearly 10 years. When the recession hit in the early 1990s, construction of major buildings virtually ceased. Skilled workers drifted off to other jobs, back to the farm or on to oil rigs where demand for their skills was high. Concrete trucks were sold off and cranes were shipped overseas to countries where construction was still booming. Demographics played a role too, said David Baxter, executive director of the Urban Futures Institute in Vancouver. "Look around you," he said. "The average bricklayer is now 45 years old, and he'll be retiring soon. We're losing those skills." That 45-year-old bricklayer will probably not be replaced because there is a shortage of 18- to 30-year-olds in the labour pool, and those who do go looking for a job steer away from the building trades. Construction has "a poor image," Mr. Morrison said. "It is seen as low-tech and dirty with poor pay. People would rather work in computers." Equipment is scarce because the Canadian construction industry has been moribund for so long that developers haven't invested in new equipment. Mr. Moro had to go overseas to buy a crane because expensive and mobile tools -- cranes, mixers and excavators -- were loaded onto trucks in the early 1990s and shipped around the world wherever the market was hottest. Equipment that stayed in Canada wasn't replaced because the owners couldn't afford to do so. "A concrete supplier isn't going to buy a new truck unless he's confident he can pay it off," one executive said, adding that much of the equipment across Canada is more than 10 years old. But after a decade-long lull, the Canadian building industry suddenly came to life last year, and those workers and machines were suddenly in high demand, especially in booming Toronto. "Toronto has recovered to 1989 [pre-recession] levels over the past 12 months," Mr. Baxter said. "That has brought labour shortages." The experts listed many major projects that are going ahead in Toronto over the next few years. Toronto-based O&Y Properties Corp. recently broke ground on the first major office tower to go up in Toronto in the past 10 years, while several other office developers are planning towers of their own. "We're starting to see office towers going up again, and retail is growing" Mr. Ziegel said. The railyards residential complex is already under way in Toronto, while a new waterfront complex and the transformation of Union Station into a transportation hub are expected to go ahead soon. Developers expect to start on a new section of the Highway 407 toll road, while work continues unabated on the $5-billion expansion of Toronto's Lester Pearson International Airport. "The airport alone is such a huge project it sucks people and facilities" away from other buildings, Mr. Ziegel said. In addition to those billboard projects, the condominium craze has made Toronto the hottest condo market in North America, twice the size of its closest rival, Chicago, while Canadian homeowners are renovating their houses, drawing plasterers, bricklayers and carpenters away from suburban developers. "It's hard to get people in the hot areas -- Toronto, Calgary and Ottawa," Mr. Morrison said. The shortage is especially bad in Ottawa, he said, where "there are waiting lists for people [in new suburban developments] because they can't put up houses fast enough." Those projects are already testing Canada's labour resources to the limit, the developers say. And the situation will only get worse if Toronto wins its bid for the Olympic Summer Games in 2008. Building the Olympic stadiums, housing and service facilities would be such a huge task that it would suck thousands of workers from other developments across the country, effectively putting them on hold until the Olympics end. And that will affect the entire industry, from the tall downtown towers to the homeowner who needs a new kitchen or bathroom. "It's tough to find qualified labour," agreed David Pye, who runs Brighton Construction in Woodstock, Ont. He builds a lot of residential additions, but has little success when he advertises for skilled wood framers. "Kids show up for work, but they don't have what you need," he said. "Some of them can't even drive." The shortage of labour and equipment will have far-reaching effects throughout the Canadian economy, the experts said, driving up the cost of major projects and causing delays or cancellations. Many homeowners are already finding it hard to find people to renovate their houses. Some are postponing their renovations while others have to pay $25 or $30 an hour to compete with the major building projects. The experts say it's hard to tell which major projects will be postponed. They said condominium towers would likely be the first, especially in Toronto. The more immediate problem is cost. Mr. Ziegel said construction costs have already risen 15 per cent in Toronto and could rise considerably more over the next few years. Costs are rising because construction companies have to pay higher wages to attract staff. Mr. Morrison said plumbers and sheet-metal workers now earn as much as $29 a hour, while electricians, carpenters and painters can pick up more than $26 a hour. |