N.B. economist says labour shortages hold back solutions to housing crisis

New Brunswick economist Richard Saillant says the province’s housing crisis is being compounded by a lack of labour in the construction industry.

In a discussion paper published by the New Brunswick Housing Hub, Saillant says a lack of workers will impede other measures intended to address the crisis.

“Unless you address the overarching constraints, everything has trickle-down effects from the very top of the housing market straight to the situation of homelessness in the province,” Saillant said in an interview.

“To me, it should be the number one priority but so far it seems to be the orphan in the debate.”

The paper outlines the impact that strong population growth has had on the province’s housing market. New Brunswick has grown by about 70,000 people since the middle of the last decade, sending vacancy rates spiralling downwards and housing prices shooting up.

Saillant said the last time the province saw similar levels of population growth was in the 1970s and the market responded, building housing at a 50 per cent greater clip than it is today. Data shows that the discrepancy in housing activity is due to a falling number of people in the construction industry, which also has a workforce that is aging faster than most other sectors in the province.

Faced with a lack of labour, developers are choosing to concentrate their resources in the province’s three largest cities, leaving rural areas experiencing the same vacancy rates and lack of inventory in the cold. Saillant says scarce labour resources have also meant that development has been concentrated towards multi-unit dwellings, even as the demand for single-detached homes has also skyrocketed.

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“The government of Canada says that in order to meet our future housing needs in this country and in New Brunswick, we have faster population growth than Canada and a tighter housing market in terms of low vacancy rates so we’re probably going to have to do the same,” he said.

“My question is, where are we going to find the labour?”

Saillant said that encouraging development that addresses the lack of affordable and rural housing will be tricky as long as the labour market remains tight.

“You can’t think about other solutions for addressing New Brunswick’s housing crunch if you don’t address the labour supply equation,” he said.

“If you think about it, if you want to move activity into more rural areas or more affordable corners of the market, if you can’t expand the supply of labour you need to migrate construction crews that are already busy building housing units to different parts of the market and that’s going to be expensive.”

Saillant said that increasing immigration to address the shortages in the industry is a necessary step, but the New Brunswick Liberals are also calling on the government to accelerate the training of homegrown workers.

As part of an eight-part housing policy document, the party is calling on the province to increase the number of people working in the trades. Liberal MLA Keith Chiasson said that it will take a cultural shift to help people see the trades as a viable career, but also work from the government to incentivize different career paths.

“I think the government needs to value trades but also link high school students with colleges and also from college to work to show kids that there is potential to become a tradesperson here in New Brunswick and make a good living,” he said.