Canada's Construction Labor Gap Set to Hit 34,000 Workers by 2035

Canada's Construction Labor Gap Set to Hit 34,000 Workers by 2035

Canada’s construction sector added jobs in 2025, but the workforce needed to sustain that growth is retiring faster than it can be replaced, according to a new BuildForce Canada report covered by the Daily Commercial News. Total construction employment climbed to 1.25 million last year, with both nonresidential and residential segments posting 2% growth. The report’s author, ConstructConnect associate economist Devin Bell, frames the real story as a widening labor gap rather than the growth itself.

Background

The Daily Commercial News reports that nonresidential construction is expected to keep expanding, with the workforce projected to grow 7% to roughly 700,000 workers by 2035. ICI (institutional, commercial, industrial) construction and maintenance work will drive most of that growth, while engineering employment is projected to decline over the same period.

The problem is exit velocity. BuildForce projects 20% of Canada’s entire construction workforce will retire within the next decade. That leaves nonresidential hiring needs at 188,700 positions by 2035, a number the incoming labor pool isn’t expected to fill. The report puts the resulting nonresidential shortage at more than 30,000 workers by 2035.

Residential construction tells a different story. Slowing population growth is expected to soften new-home demand, pulling residential employment down through 2028 before a modest recovery. By 2035, BuildForce expects residential employment to sit 4% below 2025 levels, as renovation and maintenance gains fail to offset the drop in new construction. That smaller workforce actually narrows the labor gap in residential work: BuildForce projects 117,500 new workers needed by 2035, with 113,600 expected to join, a shortfall of 3,900.

Analysis

The split between nonresidential and residential is the most useful data point in this report for field service firms. Nonresidential, where ICI and maintenance work concentrate, is both growing faster and short of labor by a wider margin than residential. That means the segments of the industry most relevant to subcontractors doing industrial, commercial, and maintenance work face the tightest labor market, not the softest one.

This isn’t a story about a slowdown creating slack. It’s a story about growth outrunning the labor supply at the same time a fifth of the existing workforce heads for the door. For any firm bidding nonresidential or maintenance packages, that combination points to sustained wage pressure, longer time-to-fill on skilled positions, and more competition for the same crews across competing bids.

The report’s own recommendation, that firms look to underrepresented labor pools, is worth taking seriously given the numbers behind it. Women make up roughly 6% of onsite construction employment and Indigenous peoples less than 5%, despite being among the fastest-growing populations in Canada. New immigrants are also underrepresented relative to their share of the overall labor force. With population growth slowing and retirements accelerating, these groups represent the largest untapped supply the industry has, not a diversity talking point on the margins.

Retention economics also shift in this environment. As the available labor pool shrinks, the cost of losing an experienced worker to a competitor rises, both in direct replacement cost and in schedule risk on active jobs. Firms that have treated training and retention as discretionary spending will find that calculation harder to justify as competition for labor intensifies through the next decade.

What It Means for Subcontractors

• Nonresidential and maintenance subcontractors, expect the tightest competition for skilled labor: BuildForce projects a 30,000-plus worker shortfall in nonresidential by 2035 against 188,700 total hiring needs, concentrated in ICI and maintenance trades.
• Residential subcontractors face a smaller but real gap of 3,900 workers by 2035, with employment dipping through 2028 before recovering, a signal to hold off on aggressive crew expansion in new-home work until the recovery materializes.
• Build recruitment pipelines now targeting women, Indigenous workers, and new immigrants, three groups BuildForce identifies as underrepresented (women at roughly 6% of onsite employment, Indigenous workers under 5%) relative to their share of Canada’s fastest-growing population segments.
• Budget for retention costs, not just recruitment: with a fifth of the national construction workforce retiring within 10 years, losing a trained crew member to a competitor will cost more in schedule delay and rehire time as the labor pool tightens.
• Engineering-focused firms should note BuildForce’s projection of declining engineering employment even as broader nonresidential construction grows, a signal to reassess backlog assumptions in that specific segment.