March 26, 2024 – Ottawa, Ontario
Although activity in Ontario’s residential sector slowed in 2023 in response to rising borrowing and construction costs, the province’s non-residential sector continued its steady growth trend, and shows little sign of slowing until at least the late 2020s.
BuildForce Canada published its 2024–2033 Construction and Maintenance Looking Forward report for Ontario today. The outlook calls for strong growth across both the residential and non-residential sectors to the end of the forecast period, with the former experiencing steady and strong growth in 2025 and beyond, and the latter driven to the end of the decade by work on a long list of major projects.
Activity in Ontario’s residential sector contracted in 2023 and is projected to do so again in 2024 under pressure from rising interest rates. The sector – and the new housing component in particular – returns to growth between 2025 and 2028 as wages and incomes adjust to prices before they trend down slightly to the end of the decade. Renovation expenditures, meanwhile, are projected to grow continuously through 2033. These factors bring residential employment to a peak in 2028 before it slows to the end of the forecast period.
The province’s non-residential sector, meanwhile, is projected to sustain a trend of strong growth that began in 2016 until at least 2029. Growth continues to be driven by a long list of major projects in most regions, including subway and light rapid transit construction and nuclear refurbishments in the Greater Toronto Area, light rail in the Eastern and Central regions, mining activity in the North, and electric vehicle manufacturing and automotive retooling projects in the Southwest. These projects maintain rising investment levels until at least 2027. They wind down in the latter years of the forecast as these projects reach peak activity and demands start to subside.
The outlook for the complete forecast period sees construction and maintenance employment rising to a peak in 2028. Thereafter, residential construction employment contracts slightly, while non-residential employment is largely sustained. By 2033, residential sector employment is expected to grow by 6% above 2023 levels, while non-residential employment is expected to grow by just over 10%.
These numbers are based on existing known demands and do not take into account public-sector initiatives to address housing affordability challenges, nor the anticipated increase in demand for construction services related to the retrofit of existing residential, industrial, commercial, and institutional buildings to accommodate the electrification of the economy. Both scenarios are addressed in separate reports to be released by BuildForce Canada at a later date.
“Ontario’s construction and maintenance sector is poised to see significant growth into the middle years of the forecast period,” says Bill Ferreira, Executive Director of BuildForce Canada. “Its challenge will be recruiting workers to address the demands created by such growth. With both the residential and non-residential sectors poised to grow well into the late 2020s, and many workers exiting the industry due to retirement, many trades and occupations could experience strained conditions. What’s more, opportunities for interregional mobility will be limited as most of the province’s regional markets will see high levels of demand.”
Although interconnected, Ontario’s five regions – Central, Eastern, Greater Toronto Area, Northern, and Southwestern – each feature discrete labour market conditions and can create complementary and competing demands for workers.
Central Ontario has seen significant growth in recent years that has been driven by out-migration from the Greater Toronto Area. Residential investment levels declined in 2023 and are forecast to do so again in 2024 as interest rates cool consumer spending on new housing construction and home renovation activities. The outlook calls for growth after 2025 as builders respond to demand created by strong migration. Investment in the non-residential sector reaches a peak in 2029 with work on light-rail transit, roads, highways, and bridges, and major healthcare projects – many of which are located in Hamilton. Employment in both residential (+10%) and non-residential (+13%) construction is projected to grow across the forecast period.
Eastern Ontario’s construction market is dominated by several major projects across the engineering-construction and the industrial, commercial, and institutional building sector. Key projects currently underway include the light rail line in Ottawa, high levels of investment in roads, highways, and bridges, and an extensive portfolio of work being driven by the federal government. Later years call for the addition of major hospital projects in Ottawa and Kingston, as well as sustained activity across public-administration buildings. The residential sector stepped back from the peak volume of housing starts reported in 2021. Housing starts are projected to return to growth between 2025 and 2028, with demand strongest among multi-family units. Total construction employment is expected to reach a forecast peak in 2028.
The Greater Toronto Area’s construction market continues to be driven by a series of large-scale public-transportation, nuclear refurbishment, new hospital, and other government building-restoration projects. These combine to create strained labour market conditions across most of the region’s non-residential trades and occupations. The outlook for the region’s residential sector sees investment levels step down for the third consecutive year in 2024 as elevated interest rates curb consumer demands. The sector returns to growth in 2025 and maintains an upward trend into 2028. Construction employment in the GTA peaks in 2028 and contracts in later years. By 2033, residential employment grows by 4% above 2023 levels; non-residential employment increases by 14%.
The construction market in Northern Ontario is heavily influenced by activity in the mining and utility sectors. Several major electric-transmission projects reached completion in 2023, causing non-residential activity to decline slightly. The outlook calls for another contraction in 2024 before growth resumes between 2025 and 2027 with the start of work on key projects such as the Thunder Bay Correctional Complex and the Weeneebayko Hospital. Regional residential construction investment levels are driven by renovation activity. The segment peaked in 2021 and is projected to continue to fall across the remainder of the forecast period due to weaker job and income growth. New-housing activity is expected to return to an upcycle by 2025, in line with demand for new construction across all unit types. Construction employment is expected to trend up to 2027 before generally cycling down to the end of the forecast period.
Southwestern Ontario has been supported by a strong housing market in recent years. Although residential sector activity declined in 2023 due to rising interest rates, growth is projected to resume again between 2025 and 2028. The non-residential sector has seen steady growth since 2016 with ongoing work on key projects such as the Bruce Power nuclear refurbishment, the Gordie Howe International Bridge, and in the automotive sector. Investment levels are expected to moderate in the short term with the conclusion of some of these projects. They rise again in 2025 with the start of work on the Volkswagen EV battery plant and accelerate strongly into 2026 and 2027 as core construction commences on the Windsor Acute Care Hospital. Employment is projected to grow strongly in both sectors through 2033.
Meeting peak demands across Ontario will be challenged by limited interregional mobility, as high levels of demand are projected to exist in most regional construction markets across the province over the near term. Construction also faces the added challenge of an aging workforce. When combined with employment increases created by growth, the expected retirement of more than 89,300 workers (19% of the current labour force) will increase overall industry hiring requirements to 141,200 over the forecast period.
Across the entire forecast period, the provincial construction industry is expected to recruit approximately 105,700 new entrants under the age of 30 from within the province. This leaves a projected gap of 35,500 workers that will need to be filled from a variety of sources outside the existing labour force to meet demands.
The construction industry remains focused on building a more diverse and inclusive labour force. To that end, efforts are ongoing to enhance the recruitment of individuals from groups traditionally under-represented in the province’s construction labour force, such as women, Indigenous People, and newcomers to Canada.
In 2023, Ontario’s construction industry employed approximately 77,700 women, an increase of over 7,000 from 2022 levels. Approximately 26% of these individuals worked directly in on-site construction. However, as a share of the total 445,300 tradespeople employed in onsite construction professions in Ontario, women made up just 5% of the workforce in 2023.
The Indigenous population is another under-represented group that presents recruitment opportunities for Ontario’s construction industry. In 2021, Indigenous workers accounted for 3% of the province’s construction labour force. That figure is unchanged from the share observed in 2016, and is slightly higher than the 2.5% represented in the overall labour force. As the Indigenous population is the fastest growing in Canada and Indigenous workers seem predisposed to the pursuit of careers within the sector, there may be scope to further increase the recruitment of Indigenous People into the province’s construction industry.
The construction industry is also committed to the recruitment of newcomers to Canada. Based on current trends, Ontario is expected to see elevated levels of immigration over the forecast period. This will make the newcomer population a key source of labour force growth. In 2022, newcomers comprised 27% of Ontario’s construction labour force, which is notably lower than the share of newcomers in the overall provincial labour force.
Increasing the participation rate of women, Indigenous People, and new Canadians will help Ontario’s construction industry address much of its future labour force needs. The rising rates of apprenticeship registration in the province are a positive trend that must be maintained to enable the industry to replace its retiring workers and to keep pace with growing construction demands.
BuildForce Canada is a national industry-led organization that represents all sectors of Canada’s construction industry. Its mandate is to support the labour market development needs of the construction and maintenance industry. As part of these activities, BuildForce works with key industry stakeholders, including contractors, proponents of construction, labour providers, governments, and training providers to identify both demand and supply trends that will impact labour force capacity in the sector, and supports the career searches of job seekers wanting to work in the industry. BuildForce also leads programs and initiatives that support workforce upskilling, workforce productivity improvements, improvements to training modalities, human resource tools to support the adoption of industry best practices, as well as other value-added initiatives focused on supporting the industry’s labour force development needs. Visit www.buildforce.ca.
For further information, contact Bill Ferreira, Executive Director, BuildForce Canada, at [email protected] or 613-569-5552 ext. 2220.
This report was produced with the support and input of a variety of provincial construction and maintenance industry stakeholders, and was funded in part by the Government of Canada's Sectoral Workforce Solutions Program.
For local industry reaction to this latest BuildForce Canada report, please contact:
Mark Arsenault
Business Manager and Secretary Treasurer
Provincial Building and Construction Trades Council of Ontario
647-402-0390
Mike Carter
Executive Director
London & District Construction Association
519-453-5322
Giovanni Cautillo
President
Ontario General Contractors Association
905-671-3969
Ian Cunningham
President
Council of Ontario Construction Associations
416-476-4774
John A. DeVries
President & GM
Ottawa Construction Association
613-236-0488, ext. 10
Paul de Jong
President
Progressive Contractors Association of Canada
403-620-3781
Tony Fanelli
Executive Director
Construction Labour Relations Association – Ontario
647-296-3402
Andrew Pariser
Vice-President
RESCON
416-970-7665
Wayne Peterson
Executive Director
Construction Employers Coordinating Council of Ontario
905-516-6693
Funded by the Government of Canada’s Sectoral Initiatives Program.
