In light of the severe affordable housing shortage in Canada, support for immigration is dwindling, with calls to reduce immigration gaining traction. While these concerns hold some validity, there exists a more nuanced solution rather than an across-the-board immigration restriction. Canada should consider admitting a larger share of immigrants with construction skills.
Canada currently faces a significant shortage of construction workers, leading to a bottleneck in housing development. The Canadian Chamber of Commerce reports that nearly half of manufacturing and construction companies struggle with labor shortages. Benjamin Tal, CIBC’s Deputy Chief Economist, estimates that there are presently 80,000 job vacancies in the construction industry, a figure expected to reach nearly 300,000 by 2032 due to an aging workforce. These shortages contribute to soaring construction costs, limited housing supply, and an affordability crisis.
Concerns that immigration worsens the housing situation are understandable, even if somewhat disproportionate. Mass immigration, especially from individuals lacking relevant skills or interest in construction work, can exacerbate the issue. The optics of such immigration policies while Canadian citizens face housing affordability challenges can damage public perception of immigration’s long-term sustainability.
The government acknowledges these challenges but remains overly optimistic about its current immigration plan’s ability to address them.
The Express Entry (EE) Program, Canada’s primary channel for economic immigrants, encompasses three programs: the Federal Skilled Workers Program (FSWP), the Canadian Experience Class (CEC), and the Federal Skilled Trades Program (FSTP). Unlike FSWP and CEC, FSTP does not require work experience that necessitates college diplomas or two-year apprenticeships.
However, Canada has never admitted more than 565 permanent residents under the FSTP annually, despite accepting over 100,000 people through the EE program each year in recent times. Furthermore, while certain construction roles qualify for FSTP, general-purpose laborers are notably excluded.
Considering all pathways to permanent residency, the outlook remains bleak. CIBC estimates that only 2 percent of all immigrants enter the construction sector, and this number is declining. Even among temporary foreign workers, only 11 percent pursue construction work.
Canada does not need fewer immigrants; it needs immigrants with the right skills. A “third way” is proposed for those who believe in the value of immigrant talent and diversity while recognizing the added demand pressures when newcomers do not simultaneously contribute to housing supply. In essence, immigration should follow a “multiplier” rule, ensuring more than one living unit is built per new immigrant, at least until the housing crisis subsides.
Addressing this challenge requires a significant overhaul. Canada must increase the proportion of blue-collar workers among incoming immigrants without significantly raising overall immigration rates. Prioritizing skilled-trade work experience under Express Entry, redistributing quotas from FSWP and CEC to FSTP, and making unqualified laborers eligible for FSTP could be a starting point. While providing stronger domestic incentives to work in construction could also help, changing immigration policy is more feasible than altering people’s employment preferences.
The truth is, Canada’s immigration strategy currently undervalues construction and trade work. The immigration point system equates education level with economic value, disregarding the alignment of skills with domestic economic needs, which is critical for an individual’s potential contribution. This mismatch is particularly evident in the construction labor market.
While well-intentioned, our existing policy distorts the labor supply away from what companies require and what Canadians urgently need. Restricting immigration is unnecessary; instead, Canada should welcome those who can genuinely make a difference.
