A new report from the Conference Board of Canada (CBoC) warns that labour shortages in the residential construction sector are significantly driving up housing costs and insurance claims. The report, Building Under Pressure – Skilled Trades Shortages and Rising Construction Costs, projects that if left unaddressed, these shortages could cost Canadians nearly $8 billion annually by 2045.

The study finds that skilled trade vacancies in residential construction are increasing at a rate of 11% per year, and are expected to accelerate to 13% annually between 2026 and 2045. By 2045, the sector could face a shortage of 32,000 skilled workers, leading to a 2.3% rise in construction prices and compounding the affordability crisis.

Adding to the pressure are the increasing frequency and severity of natural disasters, which not only elevate insurance claims but also strain already-limited construction labour. These shortages delay rebuilds, lengthen project timelines, and increase premiums, further burdening homeowners.

The Insurance Bureau of Canada (IBC) has raised long-standing concerns about how these shortages impact the insurance industry’s ability to respond efficiently after climate-related disasters. According to IBC, many new housing projects are being approved in high-risk zones for flooding, wildfires, and hail, exacerbating future risks.

To address these urgent challenges, IBC has proposed a Three-Point Resilience Plan:

• Avoid building in high-risk areas and modernize building codes to account for climate change.
• Invest in community resilience, including hazard mapping and infrastructure upgrades.
• Close insurance protection gaps through risk-based pricing, regulatory reform, and public-private partnerships.

While governments are focused on increasing housing supply, IBC warns that without a coordinated strategy to expand the skilled trades workforce and protect vulnerable communities, the crisis will deepen. Addressing the labour shortage is essential not just for housing affordability, but also for maintaining a sustainable and responsive insurance system amid growing climate risks.

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