After Covid lockdowns caused the worst economic downturn since the Great Depression, employers across the United States, the United Kingdom, Canada, Australia, and the European Union have been struggling and competing to find workers. I spoke with various industry trade association representatives for perspectives on the history of the shortage of skilled trade workers in Canada. The realities of a pending labour shortage I heard were shocking. Most professionals know that the COVID-19 policy responses globally changed the labour market dramatically.
Global advisories like Deloitte and McKinsey have been tracking the lingering worker shortages, with McKinsey reporting in 2024 that the shortages may be longer than expected.
“Labor markets in advanced economies today are among the tightest in two decades, not merely a pandemic policy-induced blip but a long-term trend that may continue as workforces age.”
Professionals across industries have been discussing impending skilled labour shortages for years before COVID-19.
Alex Fulthorpe, President at Blackstone Industrial Services has commented that the looming retirement of huge numbers of Baby Boomer generation workers has been an ongoing issue – creating a labour shortage in Canada in several key industries as well as energy.
“This demographic issue, in all trades, has been an issue for 20 years. Parity of esteem in the trades needs to be taught at youthful ages and echoed in the community or it will never be fixed. This issue is why we built our business and defend the value of highly skilled trades. It’s a Western civilization issue.”
Skilled trades are often referred to as “nation building” as the workers literally build and maintain the buildings, structures, infrastructures, facilities, and technologies that make modern cities, countries and modern life possible.
The reality is emerging that all industries, including the Canadian energy industry, have not been anticipating and attracting the newer generations of workers that are critical to replace the ongoing retirement of their most experienced workers.
In 2021, RBC’s Skilled Trades Report forecasted that over 700,000 skilled tradespeople are expected to retire by 2028, while fewer younger workers choose careers in trades as “an outdated perception of the trades has hobbled recruitment efforts.”
To use the energy industry as an example, in April 2024, Reuters reported that annual shutdown/turnaround maintenance on Canada’s oil sands plants was forecast “to cause no more disruption than usual this year.” Meanwhile, the same report also noted that “trade union officials are warning of a labour crunch during Alberta’s 2025 turnaround season as construction takes off on two new industrial projects.”
So, how can Canadian industries address the challenge of impending labour shortages, and what policies would help?
At the Canadian Institute Shutdowns-Turnarounds Superconference 2024 in Calgary, a panel of leaders across several industry trade associations and companies assembled to discuss strategies to overcome skilled labour challenges.
The discussion tied part of the reason for the diminishing pool of trades workers to a perception in developed countries of trades jobs as being “lesser than” or less desirable than other professions such as doctors, dentists, engineers etc. The perception didn’t seem entirely due to the compensation levels but more due to a tendency in schools to devalue careers and training in trades. Panelists agreed that work to explore opportunities to improve recognition and respect for trades would go a long way to motivate students to seek a career in the trades. Terry Parker, Executive Director of the Building Trades of Alberta, suggested that the education approach used in Germany could be effective.
“We saw the difference in the way that people were respected in the trades in Europe- especially in Germany- with the parity of esteem in how a doctor was treating a construction or a trades worker – the way everyone would be treated with the same amount of respect. We don’t see that in Canada and we need to be on that same level playing field where teachers are telling the students ‘It is okay to be a construction worker or it’s okay to be a tradesperson,’ and have that mutual respect. I know it’s going to take years before we get there, but we have to work towards it so that we start seeing more people coming into the trades.”
Paul Dejong, President of the Progressive Contractors Association of Canada, spoke to the challenge in the construction industry in Canada and internationally, which is focused on short-term solutions even though it has been known that the labour shortage problem is long-term in nature. He proposed changes to Canadian public policy.
“There are two areas of policy change I think need to occur. We have a robust immigration pathway system in Canada. If you’re coming to Canada with a trade certificate, there are two problems that you have. One is to have your trade certificate recognized in Canada and that’s not hard to overcome. The other problem is that there is a point system. If you’re a dentist, a doctor, an engineer, a scientist, or an accountant immigrating to Canada, there’s a point system that gives you better access to landing in Canada than if you’re a person with a trade certificate. We should have an equal footing when it comes to professional designations, whether they’re an academic designation or one that comes from the trade school.”
Shandra Linder, President of the Association of Maintenance Contractors of Canada spoke to the long-term strategy issue dating back to 2010 when her association and others identified the looming labour shortages.
“We knew we were having a demographic cliff in 2010 in the energy industry,” Linder said. “And we put all these resources into long-term strategies. But when the bottom dropped out of oil in 2015/2016, we dropped those strategies.”
Linder advised that since the energy industry foresaw the worker shortage fourteen years ago, now in 2024, the discussion has become urgent.
“What do we do in March of 2025?” Linder asked. “We are hitting an epic number of construction activities, incredible numbers of major (energy) turnarounds not just in Alberta, but also in Saskatchewan, and out east. What are we going to do? We’ve got four months. Some of these folks are already in the preplanning and pre-work stages. So where are the people coming from?”
Linder had a few solutions that could be implemented immediately. She suggested revising some work plans to get some of the bare minimum work done. She suggested that understanding that a project will not get 3500 people for 45 days in April 2025, or September 2025, or even April 2026 can enable a company to focus on setting reasonable expectations if they can only get 70% of the workforce required. This approach could work better, encouraging companies to optimize their workers. She also suggested utilizing the trades according to regulations, not purely according to jurisdiction, and not over-utilizing specialized trades.
The timing of projects, such as shutdowns and turnarounds, is important in the energy industry. Due to weather and season constraints, operators are pressured to schedule their turnarounds in the same period. In Alberta, in December, January and February, the weather is extremely cold with peak demand for production and doesn’t lend itself to shut down and turn around activity. In the summer, workers who have just worked the spring turnaround season and have worked continuously for 60 days of 12-hour shifts are ready for a break. So, July and August is a natural time for a break and they are unavailable for work.
However, there may be an opportunity to tweak the timing of turnaround projects. It may not be possible to change a company’s turnaround date by weeks, but they could be moved by days to simultaneously ease the demand of all the companies requiring their workforce. She suggested that to manage that feat, companies could manage information about shutdowns and turnarounds by developing an appropriate aggregate forum or venue for discussions.
The following policy ideas could ease the looming demographic cliff.
- To promote immediate change, policies should encourage private companies to create project-based schools, mentoring programs, and job shadowing, leveraging their experienced trade mentors on site. These initiatives could be supported by public funding through existing federal programs and potential provincial funding.
The idea of onsite private schools isn’t new. For instance, Bechtel Corporation established a local welding school during the Great Canadian Oil Sands Project in the 1960s. Additionally, pre-qualification requirements for non-professionals could be adapted to fit schools and mentorships better.
- For immediate to medium-term effect, provinces could collaborate with companies to develop and implement provincially held & managed platforms to manage information about projects and labour requirements to implement an aggregate forum for the distribution of labour.
- For medium-term effect, policy changes could be made to improve the immigration pathway system in Canada and implement a similar point system as the professions- doctors, dentists, etc.- to give experienced, qualified trades better access to landing in Canada.
- For the medium-term effect, addressing workforce concerns about stagnant wages amid inflation, and implementing rate reviews to align wages across Canadian provinces could enhance workforce mobility and attract talent for projects in different regions.
- To achieve long-term results, we need a policy focused on “Teaching the Teachers.” This involves creating provincial programs that provide information sessions and materials for educators in collaboration with trade associations. The goal is to encourage teachers to highlight the value of trade programs and careers and recognize and encourage students’ aptitudes. Ultimately students could be motivated to pursue training and build careers in the trades, reflecting the principle of parity of esteem.
Maureen McCall is an energy professional who writes on issues affecting the energy industry. She writes here for the Frontier Centre for Public Policy
