Construction companies face supply and labour shortages

2020 was a boom year for home renovation and new home construction. Renovation companies are seeing an increase in volume upward of 25% . Home building companies have also seen a 25%-plus jump in business, according to Karen Slaunwhite, executive-director of the Canadian Homebuilders’ Association Nova Scotia. “The boom was driven by two key factors: COVID impacting the renovation side while immigration and people relocating to Nova Scotia pushed the demand for new home construction.” 

Slaunwhite says a major challenge for both renovation companies and home builders is finding supplies. She says people undertaking DIY projects while cooped up at home during COVID lockdowns put pressure on obtaining building materials, and that trend will continue through 2021.

During 2020 supply shortages were an issue and this trend has continued into 2021. “It is still a battle to secure and receive product in a timely way because the logistics and timelines are impossible to estimate as a result of shutdowns that are taking place in Ontario and Quebec, who provide a large portion of supplies to our industry,” said Slaunwhite. “On the renovation side, our members are not starting the contracts until all the supplies are locally available, because it would be horrible to tear out a client’s bathroom and then they have to wait weeks, because the sink or toilet is not available.”

Supplies such as lumber are not only difficult to obtain, the price has risen as much as 50% over the past year. “It is difficult to quote a price for a client that will not change, and clients are being informed that the quoted price may increase as a result of the cost of purchasing materials,” said Slaunwhite.

“At the beginning of COVID, labour was not a huge issue but as the boom continues the difficulty in contracting the sub-trades for gutterwork, roofing, and insulating is only going to escalate. It is anticipated that the boom will continue and our members will be busy in 2021.”

Commercial builders

Construction companies that build multi-unit apartment buildings, hotels, schools, and hospitals are also finding it harder to find enough skilled people to do the work. Some are ramping up training in-house.. There is more demand than supply in trades such as bricklaying, drywalling, and carpentry according to Trent Soholt the executive-director of the Nova Scotia Construction Sector Council. That’s the non-profit association that does labour market research for industrial, commercial, and institutional builders such as Ellis Don, Fares Group, Westwood, and Southwest Properties.

Soholt says one response to labour shortages are the Community Benefit agreements signed by the province, contractors, and unions working on the new hospital and community college projects in Cape Breton. Contracts on these projects include language that expand and improve training opportunities for under-represented groups such as women, indigenous people, African Nova Scotians, immigrants, and people with disabilities. 

“The NS Apprenticeship agency has been proactive in making this happen,” says Soholt. “I believe the under-represented groups are our biggest opportunity with these generational building projects and will help provide the workforce of tomorrow. The term ‘labour shortage’ isn’t a thing we will be facing all the time.”

Soholt hopes Community Benefit agreements will be negotiated as part of the contracts awarded to build new facilities to replace the Victoria General hospital but says it’s too early to predict if that will happen.

During the pandemic, the government designated construction as an essential industry. Despite the number of cranes on the skyline around the Halifax Regional Municipality, Soholt estimates the volume of commercial and institutional construction activity across the province was down slightly from 2019, mostly due to increased precautions around COVID and disruptions to supply chains. Those final numbers aren’t available yet but his best guess would be a 10% slowdown. 

Unlike most home renovations, decisions on whether to invest money to build apartments and hotels are taken more than a year in advance. It’s probable COVID could have more of an impact on the order book for 2021 than 2020.

“Contractors have shared with us that this year (2021) and next year (2022) is a bit of a concern, especially where private-sector investment is involved,” said Soholt. However, some huge capital projects are on the horizon which should more than compensate for any decline there. 

“The public sector, as I’m sure you know, with investment coming to Cape Breton with the new hospitals and community college and the QE2 redevelopment here in Metro represents an unprecedented level of investment by the province,” said Soholt. “So we are on the eve of that and the forecast is looking excellent. We are planning to try to make sure the colleges, the contractors, and the unions have the training programs in place so they can perform these projects well.”

As one example, plumbers and pipefitters will need specialized training in order to bid on contracts to supply medical gas to the clinics and state-of-the-art hospitals being built. The alignment of trades with megaprojects is always a challenge; welding and machining programs were ramped up at community colleges to train workers for Irving Shipbuilding. The Examiner is told while bricklayers are in short supply, there is currently a surplus of electricians across the province. 

Meanwhile, the Bayers Lake Outpatient clinic has yet to advance much beyond the site preparation stage. Soholt says P3 projects require more upfront, detailed planning to ensure construction schedules can be met without cost overruns or delays. Labour is and should not be an issue that delays construction on these high-profile government projects, he claims. The targeted completion date for Bayers Lake is 2023 and construction on the new buildings at the Halifax Infirmary site won’t begin before the summer of 2022 at the earliest.