Shortage of skilled tradespeople

A shortage of qualified people to work in skilled trades is making rising costs of living even worse, economists and trade industry veterans say.

“It used to be 70 or 80 bucks for somebody to come to your house as a service call just to look at your dishwasher; now you’re going to pay double that,” said Mandy Rennehan, founder and CEO of construction company Freshco, which specializes in building retail stores.

And it’s not just homeowners paying the price.

“Anybody can expect to bear some of impacts of this shortage,” said Simon Gaudreault, chief economist and vice-president of research for the Canadian Federation of Independent Business (CFIB) based in Montreal.

From a lack of transportation mechanics driving up the cost of bus fare and plane tickets, to a shortage of cooks affecting menu pricing at restaurants, “this is all interconnected in ways that sometimes people underestimate,” Gaudreault said.

It’s a bad time to be a consumer if you want anything done that involves a tradesperson.– Mandy Rennehan, construction company CEO

He said these “underappreciated” careers are not just critical to our economy — they impact us as individual consumers, too. A CFIB report found that small Canadian firms lost $38 billion in business opportunities due to labour shortages in 2022, with the construction sector bearing the largest portion.

Rennehan, whose business is based in Burlington, Ont., said skilled tradespeople have always commanded a good wage, but with fewer of them to do the work, salaries have shot up.

“It’s a bad time to be a consumer if you want anything done that involves a tradesperson,” Rennehan told Cost of Living host Paul Haavardsrud.

The shortage of skilled tradespeople has been developing for years. About 700,000 of the four million Canadians who work in the trades are set to retire by the end of the decade, according to Employment and Social Development Canada.

A culture that exalts university education and knowledge work over apprenticeship and working with one’s hands is also partly to blame, said Rennehan. Additionally, there can be barriers to landing an apprenticeship position, such as finding an employer willing to take on someone with no experience, or limited spaces at colleges.

On top of all of that, said Rennehan, our country and its infrastructure are growing, which means the five or so largest companies who do those big-scale projects hire up many of the available skilled tradespeople.

“And so the small companies or the mid-cap companies, kind of like us, you know, we’re … down at the bottom, scrounging to find talent,” said Rennehan, who also hosts Trading Up with Mandy Rennehan on HGTV.

According to CFIB job vacancy estimates — calculated using Statistics Canada data and 1,700 responses from its own survey of business owner-operators, the overall vacancy rate during the first quarter was 3.5 per cent.

But key sectors that employ skilled trades had higher than average vacancies, said Gaudreault. In construction, for example, the rate was 5.1 per cent (a figure that includes all roles in the sector, like receptionists), and in hospitality it was four per cent.

Not enough cooks in the kitchen

That jibes with what Kelly Higginson, president and CEO of the industry association Restaurants Canada, is seeing in her field, where trained chefs are hard to find.

“Currently, our industry has over 78,000 job openings, so this has put significant pressure on wages,” said Higginson, citing Statistics Canada data. “We’ve seen labour costs increase over 15 per cent in two years.”

Higginson, who is based in Toronto, said the industry has always operated on thin margins given the number of people and amount of overhead it takes to run a restaurant.

She said restaurants have tried to absorb the increased cost of labour. But with other costs rising, like utilities, food and insurance, Canadian customers will continue to see the impact on their bill.

The latest version of the organization’s Restaurant Outlook Survey, conducted online last fall among 470 respondents representing 4,119 restaurant locations, says respondents expected menu prices to go up another six per cent in 2024.

Adding to housing affordability crisis

The shortage of skilled tradespeople could also be making the roof over your head a little more expensive.

When it costs more to hire carpenters and HVAC technicians, fewer purpose-built rental or condo buildings will go up, and construction costs for the ones that do get built will be higher, said Steven Tobin, CEO of LabourX, a consulting firm that specializes in labour market issues.

“[That] means rents need to be higher or condo prices are going to be higher.”

Tobin said Canadians are “absolutely” already experiencing the effects of the labour shortage as part of the affordability crisis.

“Many of our goods and services … rely very much on skilled trades, in order to manufacture or deliver, service these goods. So if we’re unable to find the right labour and skills to produce that, then there’s just less supply and … inevitably the price will go up, which will impact the pockets of Canadians.”

Where businesses are able to acquire the labour they need, they’re likely doing so by offering higher salaries, and some of that gets passed on to the consumer, he said.

Dave Mulcahy has been a mason for 46 years, and he’s also an instructor at the Ontario Masonry Training Centre in Ottawa. He said the biggest difficulty is enticing young people to pursue those careers in the trades, so he’s hoping word will spread about just how good the pay can be.

“If you were to start today, there’s a very, very real chance in about four years you could be making six figures a year,” he told Catherine Cullen, host of The House.

While the shortage is a complex problem, Gaudreault said the CFIB hears from members that they need flexibility around training, like allowing a licensed tradesperson to take on more apprentices at a time, for example.

He said it would also help if Canada’s system of evaluating immigration candidates gave more weight to those who have experience in the trades.

“When you look at the scoring system, a lot of the points go towards, like, having a master’s or having a bachelor or having a PhD,” he said. “And I am not sure that we put enough points perhaps on the skills that are really in demand right now on the job market.

“I’m not saying that having a PhD is not a great thing, but perhaps we can do both, right?”