It's time for a new Canadian Industrial Strategy that makes Canada Greater, Stronger, Better.
January 15, 2025
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It’s time for a new Canadian Industrial Strategy that makes Canada greater, stronger, and better, but what do we need to focus on and how do we move towards that?
A staggering 72% of B.C. contractors report a shortage of skilled tradespeople, according to the Independent Contractors and Businesses Association’s (ICBA) 2025 Wage and Benefit Survey of its construction members. This persistent issue is forcing businesses to delay or turn down projects and absorb rising costs, which undermines B.C.’s ability to address its housing and infrastructure needs. Further, 63% of respondents said government is on the “wrong track” in dealing with a business like theirs (construction contractors).[1]
This same picture is repeated across Canada and it remains a critical issue and that will require cooperation and coordination between government, private business and other significant stakeholders. One of the problems we face is the simple fact that skilled labour shortages have been a Canadian issue for many, many years and collectively we have failed to adequately deal with the problem.
At the heart of the problem are two significant factors that can be and should be addressed. First is the interaction between major construction project owners, contractors and other stakeholders does not encourage one party to “own” the labour shortage problem and establish a strong basis for cooperative efforts to deal with what is a systemic problem. The second related issue is that collectively we have not established a consensus with respect to why the problem continues to persist. Many of the stakeholders will legitimately claim to have made efforts to fix the problem but with very limited success. This suggests that we need to rethink the cause of the persistent shortage.
In construction and we can include engineering, procurement, construction management and a host of other related activities in this, the demand for skilled construction labour at any one large enterprise naturally and consistently goes up and down. Due to these cycles the labour force moves on to the next project in order to find and maintain work. Therefore a company’s investments in training and skills development may be lost at the end of a given project because the company no longer has the work to maintain the workforce. So, the question of who pays for the training and development comes up. Should it be the owners? the unions? the contractors?. Project owners do not want to pay for activities that do not necessarily benefit them long-term as they are focused on ongoing operations and only the immediate construction needs of their short term project.
Since the costs of skills development cannot be passed on to clients, contractors are also not interested in incurring training costs that will eat away at their profits, even if those costs represent investments that will generate future work and future profits.
Despite the fact that there has been a tremendous amount of construction activity, (e.g. major capital projects, the development of infrastructure and the expansion of housing stock etc.), the overall construction market seems to be regarded as risky in Canada. In fact, there is a great deal of latent demand with many planned capital projects especially in our resources sector that remain in the early planning stages because the project owners are uncertain about investments in Canada. Our failure to improve productivity in the construction sector over the past decade has contributed to the perception that investment in Canadian resources are risky and may be fraught with issues.
In addition to the skills shortages and productivity issues the other big issue is the uncertainty of dealing with government agencies and other stakeholders who have created very real barriers to project development. It is understandable and commendable that government agencies exist to review how a given project will impact on the environment, local communities and the overall economy. However, on a global scale the massive delays in permitting and other approvals in Canada make investing in other countries more attractive and has created a chilling effect on construction activities across Canada.
The solution is to put these issues into a broader conversation about how Canada will compete in the global economy. Our interdependence with the U.S. has been and continues to be threatened by U.S. protectionist policies that potentially could impact on our ability to maintain our sovereignty and independence. It is time to look at how we can establish industrial policies that encourage investment in Canada and in particular investment in value-added activities like refining raw resources and creating finished goods for export.
There are Asian and European markets that are open to receiving Canadian imports of refined petroleum products, liquid natural gas, minerals and finished goods. What we need is a national strategy, supported by the provinces, that addresses the systemic issues related to permitting and approvals, interprovincial mobility (and trade) and productivity. It is within our collective ability to develop a vision, strategy, policies and practices that will ultimately create viable infrastructure and a vibrant economy. And…. moving forward in these ways will have a positive influence on people who might contemplate careers in construction and thus expand the labour market.
We need leadership and cooperative efforts to drive forward with a Canadian agenda. The threats from south of the border ought to be our wake-up call to act and begin to develop Canada as something more than “hewers of wood and drawers of water.[2]”
There needs to be an active forum of contractors, labour leaders, government agencies, project owners and other stakeholders to develop a national strategy that not only addresses the immediate labour issues (supply and productivity) but helps develop a sustainable Canadian economy that is immune to external threats.
Dependency on natural resources is ultimately a short-term approach. Other countries like Norway and Qatar have been able to see that the short-term exploitation of oil and natural gas respectively can be used to finance a balanced, sustainable future. Canada’s wealth in natural resources and its ability to educate and develop people puts it in an excellent position to develop a similar approach and gain full economic independence in short-order.
It is likely that we will have a federal election in 2025 and the issue of a national economic strategy and vision should be front and foremost given the existential threat being posed by the U.S. government. This is the best way for us to fight back and it is hoped that a group of leaders can emerge that will take up this mandate and develop a made-in-Canada solution that will define our national identity for decades to come.
[1] https://www.linkedin.com/company/independent-contractors-and-businesses-association-of-b-c/posts/?feedView=all
[2] The phrase “hewers of wood and drawers of water” comes from the Bible, but it was the Canadian economist Harold Innis who used it in his 1930 book, The Fur Trade in Canada, to describe our traditional economic dependence on resource production.