The Evolving Landscape of Canadian Construction: Insights from KPMG’s Latest Report

The Canadian construction industry is undergoing significant transformation amid challenges like skilled labor shortages and the imperative for technological advancement. A recent report by KPMG, in collaboration with the Canadian Construction Association (CCA), offers valuable insights into how companies are adapting and what the future may hold.

Understanding the Skills Gap

As of 2025, the construction sector continues to grapple with a critical shortage of skilled labor. According to KPMG’s third biennial survey, 78% of firms are currently facing difficulties finding qualified workers, a slight improvement from 90% in 2023. This shortage is not just a numerical issue; it directly impacts companies’ ability to bid on new projects or complete ongoing ones, which has been cited by 70% of respondents.

Implications for Future Workforce

The looming retirement of existing workers greatly intensifies these concerns. The Canadian Home Builders’ Association warns that approximately 22% of residential construction workers are set to retire in the coming decade. Meanwhile, the Canada Mortgage and Housing Corporation estimates that over a million additional workers will be needed to meet the demand for 3.5 million new homes by 2030. This gap highlights the urgency for effective recruitment and retention strategies within the sector.

Harnessing Technology for Productivity

Despite the labor challenges, many construction companies report improvements in productivity and efficiency, largely due to significant investments in technology. A remarkable 81% of firms indicate that technological advancements have positively influenced their operational capabilities.

Key Technologies Driving Change

The KPMG report identifies several cutting-edge technologies being integrated into construction processes. These include:

• Drones for site surveys
• Robotic bricklaying for enhanced speed and accuracy
• Modular and prefabricated construction methods, which streamline project timelines by allowing portions of buildings to be manufactured off-site

These innovations are not just enhancing productivity; they’re reshaping how construction projects are conceptualized and executed.

Evolution of Procurement Processes

One of the standout findings in the survey indicates a noticeable shift in procurement processes. A substantial 80% of respondents stated that procurement is evolving to foster innovation and the adoption of digital tools—an essential factor as the industry seeks to modernize. However, CCA President Rodrigue Gilbert emphasized that while encouraging progress is evident, significant reforms are still needed.

The Need for Value Over Cost

Gilbert pointed out that the current procurement system often favors the lowest bid over long-term value—a practice that hinders investment in innovation. He advocates for governmental reforms to encourage collaborative approaches and fair risk-sharing, essential for nurturing a modern and productive construction sector.

The Role of Artificial Intelligence

The survey found that an increasing number of firms are prioritizing artificial intelligence within their operations. About 53% indicated they are focusing on AI-driven software, while 90% see potential in tools like AI and analytics to enhance productivity. This future-focused investment signifies a growing recognition of the transformative power of technology in addressing traditional industry challenges.

Conclusion: Preparing for the Future

KPMG’s recent findings paint a compelling picture of the Canadian construction industry at a crossroads. While labor shortages persist, the commitment to technological advancement offers a glimmer of hope. As the industry continues to evolve, addressing procurement practices and embracing innovative technologies will be crucial in overcoming these hurdles.

The pressure is on the construction industry to accomplish more with less, and it is clear that the bet on technology and efficient procurement practices could make all the difference in securing a prosperous future for Canadian construction. The path forward may be fraught with challenges, but the potential for growth and improvement is palpable, marking a period of exciting transformation for the sector.