State of the Industry

There are over 260,000 firms in the Canadian construction industry: over 65,000 in residential construction and 150,000 in trade contracting industry. The industry accounts for 12 percent of Canada’s GDP. Construction workers are involved in the installation, repair or renovation of more than $150 billion worth of work every year. Three key factors define the industry’s structure and performance.

  1. Cyclical activity – Construction is one of Canada’s most cyclical industries, subject to massive and unpredictable swings in demand. The construction industry is three times as volatile as the service sector and nearly 50 percent more volatile than the manufacturing sector.
  2. Geographic diversity – construction projects are spread evenly across the country in direct proportion to demographic and economic factors.
  3. Strong local presence – Construction is a site-specific activity, requiring hands-on management and knowledge of local labour conditions and regulations. Government policies encourage growth of localized construction industries.

The industry has evolved into small-specialized companies that are able to operate successfully in a feast-or-famine market environment. Firms maintain little overhead and expand and contract their operations in response to changing business conditions. The need for a strong local presence has resulted in the industry being primarily Canadian owned and controlled.

There are three types of construction activity:

  1. Residential Construction – Includes family homes, condominiums and apartment buildings. Growth is driven primarily by demographic factors, disposable incomes, and interest rates.
  2. Institutional, commercial and industrial construction – all non-residential buildings, including factories, hospitals, shopping malls, offices, and manufacturing plants. The strength of the goods and services sector and demand for institutional services affects growth in this activity.
  3. Engineering construction – Non-building projects such as roads, pipelines and oil and gas facilities. This sector is influenced primarily by government infrastructure spending and the natural resource industry.

Governments play a role as both a regulator and a property owner. Government funded institutions account for one-third of non-residential construction activity.

Federal – Develops model national building codes for construction and establishes the parameters for federal environmental assessments.

Provincial – Establishes the construction codes, labour standards, environmental regulations, and parameters for municipal zoning regulations.

Municipal – sets zoning requirements, approve building applications, issue building permits and conduct building inspections.