As the construction industry enters the new year, it faces a complex and challenging landscape. The ongoing labour shortage remains a pressing issue, becoming a significant bottleneck for projects across Canada and causing ripple effects throughout the insurance sector.
With the demand for skilled workers outpacing supply, clients are contending with rising costs, extended timelines, and the difficulty of upholding quality standards. Tyler Averill (pictured), president, Canada retail insurance at Gallagher, stressed the need for the construction insurance sector to adopt innovative solutions to navigate these challenges.
He emphasized that, while addressing labour shortages is critical, the industry must also stay ahead of emerging trends, such as technological advancements and the growing focus on sustainability.
The Canadian Construction Association reports that while census data indicates a 9.2% increase in construction workers from 2016 to 2021, bringing the total to 1.3 million, the industry is still dealing with over 93,000 unfilled job openings across the country.
Further highlighting the labour shortage issue, it's estimated that Canada will need about 500,000 more construction workers on average to keep up with the growing demand for housing between now and 2030.
"We're not seeing the influx of workers the market needs," Averill noted, pointing to several potential factors behind the decline, including a shift toward more technical jobs and a decreasing interest in construction careers.
As a result, Averill highlighted that insurers are likely to prioritize construction clients with strong, reliable workforces. "For insurers, a big component of how they look at 2025 is going to be about how we evaluate those clients that have good labor in place - clients with the best quality workers, who ultimately deliver the best possible outcomes," he explained.
In a market grappling with ongoing labor shortages, Averill highlighted a key opportunity for brokers to add value to construction clients: getting involved early in projects and encouraging the use of advanced technologies during construction. For example, incorporating sensors to detect leaks early on can greatly reduce risks and help ensure higher-quality project outcomes.
Despite investing in these technologies, Averill pointed out that construction clients often don’t see premium relief, underscoring the need for greater collaboration among stakeholders. "The carriers providing property coverage after a project is completed aren’t always the same ones insuring the construction phase," he explained. "There needs to be better alignment to fully recognize the benefits of these technologies throughout both the pre- and post-construction phases."
Averill also emphasized the critical role insurers and brokers must play in advancing sustainable construction practices. He pointed to green building initiatives and materials like mass timber as key opportunities for support. "Mass timber is widely available, particularly in Canada, but insurance capacity for it is limited, and the terms are often significantly more expensive than traditional steel," he explained.
This disparity creates a hurdle for adopting sustainable materials. "Instead of encouraging builders to use environmentally friendly options, it drives them toward less sustainable choices," he emphasized.
“It's not 100% the insurers’ responsibility to provide benefit to the builder for using these types of materials. But if insurers could align themselves, that would be great.”
Another key trend in 2025 that Averill expects to see more of is reshoring - the process of manufacturing moving back from overseas to North America. He noted that much of this new construction will be focused on builds like data centres and battery plants, which will open opportunities for insurers to dive deeper into these specialized sectors, which often require unique insurance solutions tailored to the specific risks they present.
“There are opportunities for insurers to really get their brains around how they can support the construction of these new projects,” Averill said.
