Building boom helps P.E.I. lead in growth, but labour shortages persist

P.E.I.’s GDP grew by 3.6 per cent in 2024 thanks to development and construction. But builders are still struggling to keep up thanks to labour shortages.

Prince Edward Island has once again posted the fastest economic growth in the country, driven in part by a surge in construction.

P.E.I.’s GDP grew by 3.6 per cent in 2024, outpacing every other province and more than doubling the national average of 1.6 per cent. Development and construction were key drivers, with new homes, schools, clinics and commercial buildings underway across the Island. The sector contributed $580 million to the provincial economy last year.

“That’s a big chunk of change here in little old P.E.I.,” said Sam Sanderson, executive director of the Construction Association of P.E.I. “Construction has never been in this much demand ever before in the history of construction, not only in P.E.I., but right across Canada.”

However, as the pace picks up, labour shortages are making it harder to keep up with demand, especially with more people arriving. Between 2020 and 2024, P.E.I. gained more than 22,000 residents, outpacing the previous 20 years combined.

In Stratford, one of the fastest-growing municipalities in the province, new homes are going up quickly, but not quickly enough to address the province’s housing shortage. Industry leaders say more people aren’t the problem, but they can be the solution.

“Money’s never going to fix this problem,” Sanderson said. “It’s skilled people, and skilled people only.”

Across Atlantic Canada, an aging workforce and a shortage of tradespeople are driving labour gaps in key sectors.

That could get worse, according to economists, with recent federal cuts to immigration programs that once helped fill those roles.

Ottawa has capped international student permits and reduced access to temporary foreign workers. At the same time, it’s scaling back permanent immigration targets, a shift that could slow the flow of newcomers to key sectors in P.E.I., from construction to health care.

“Anything that we can do to bring young people into Canada to help support those industries will help us in the long run,” said Patrick Brannon, senior researcher with the Atlantic Economic Council.

For now, population growth has outstripped housing supply. Experts add that without the political will and action to support home construction, such as easing municipal zoning rules, the pressure will persist. For Islanders, affordability challenges will continue.