We Need A Faster Pace Of Home Construction But There Are Not Enough Tradespeople
Posted April 16, 2021
The single most welcome achievement of the McNeil years was the uptick in Nova Scotia’s population, which is closing in on one million and expected to continue strong growth. The new arrivals, many recruited from around the world by employers here, are a wonderful addition to our economic, social, and cultural fabric.
Demand for new housing is strong and the supply is barely keeping up. Many of the construction trades are stretched to the limit. All signs point to further pressure on the housing supply.
Net interprovincial migration reached 2,705 working-age Canadians in the twelve months ending last July, far exceeding the goal of 1,000. The opportunity for many people to work remotely will accelerate this trend.
Likewise, the goal of retaining 10% of international students as Nova Scotians has been exceeded by 2%.
Nova Scotia’s goal to receive our proportionate share of international migrants has also been exceeded in recent years. The federal government has set a target of 400,000 migrants per year for three years to make up for the lull due to covid.
Finally, the resumption of full-time in-person learning will bring thousands of students back to an already crowded residential market.
In this context, the Department of Labour and Advanced Education (LAE)’s response is distressing. They were asked what is being done to deal with the large and growing labour shortage. In reply they said:
“LAE is not aware of any urgent or immediate labour market needs in the construction sector, however needs vary by skilled trade. We continue to work with our partners, such as the Construction Association of Nova Scotia and the Nova Scotia Construction Sector Council, to monitor the labour supply in Nova Scotia. The Nova Scotia Apprenticeship Agency (NSAA) recently commissioned a study that was produced in December 2020 and found that employment in Nova Scotia’s construction trades sector is anticipated to experience a moderate decline of 2.5%.”
The study referenced by LAE anticipates a serious shortage in many key construction trades including carpenters, bricklayers, millwrights, roofers, and mobile crane operators.
It is based on future population growth that is lower than the province’s goals and track record: “Over the next decade, migration levels are anticipated to decline from the peak, but are expected to remain well above historic levels. Net interprovincial flows are also expected to moderate …”
To sum up, having underestimated future population growth, the study says that even by their projections we will not have enough construction tradespeople.
As travel restrictions ease, the pace of new arrivals will grow and today’s multitude of new housing projects will not keep up. Many of the most experienced tradespeople will become tied up by the Cape Breton and Halifax hospital projects.
Meanwhile, the province has extended rent control and vetoed “renovictions”, and Halifax has been slow to open up new serviced land for construction.
The consequences will be:
- The prices for both buyers and renters of new buildings will continue to rise, locking more millennials out of the market. Nova Scotia could lose much of its price advantage over Canada’s largest cities.
- Landlords will have diminished economic incentive to provide good maintenance on their buildings.
- Buildings that were going to be replaced with new structures with many more units will remain in place and be allowed to deteriorate.
- Building costs will become even more expensive because of the scarcity of labour. As a result, most new construction will target the upper end of the market.
- Ultimately, we may throw away the opportunity to grow our population and resulting tax base, making it much harder to pay off the extra $1 billion of debt we will have because of the covid pandemic.
- The drive to increase our stock of affordable housing will be hobbled by high prices and by builders preferring to work on the more expensive projects.
A recent Economist article noted that Vancouver is the second most expensive city in the world after Hong Kong. Vancouver is surrounded by water on three sides and the Rocky Mountains to the north. And, the city makes it very difficult to build tall buildings near the city center. Disadvantaged people are driven out or retreat to roach hotels on the east side.
Halifax has done a good job of enabling taller buildings on the peninsula but does not have Vancouver’s constricted geography. Yet, serviced land for new housing is scarce everywhere, especially for families. Combined with rapidly increasing materials costs, it risks becoming too expensive for many people that have been attracted by the province’s many charms. These are self-inflicted wounds.
There are many excellent programs to attract people to apprenticeships. We should be working hard to add skilled tradespeople both by adding more of them and by using the provincial nominee programs for immigrants.
Missing is an informed sense of how many workers we will need in each of the building trades, let alone a coordinated plan to make sure we find that many.
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