2026 Industry Report: Construction, Tech, Professional Services

Running a business in 2026 means operating in one of the most complex HR and legal environments Canada has ever seen. This industry report examines the current state of the Construction, Tech, and Professional Services sectors, focusing on labour shortages, regulatory pressure, and rising employee expectations around benefits, mental health, and flexible work. 

The goal is to present objective, data-driven evidence of the HR and legal pressures these industries face, and highlight where HR and legal issues intersect with business risk.

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Construction: High Demand, Not Enough People

Canada’s construction industry is the driving force of Canada’s national GDP, housing affordability, and infrastructure — there were 1.6 million construction workers across Canada in 2024, taking up 8% of total employment. With the fierce labour shortage impacting construction businesses’ production capabilities, this is a problem that affects all Canadians, including other industries.

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The Labour Crunch

Construction employers are being squeezed by the labour shortage in Canada, both in residential and ICI work. In British Columbia alone, 72% of construction contractors can’t find enough qualified, skilled workers in the trades they require, with 83% of companies identifying the Canadian labour shortage as their biggest challenge.

This is spilling over into their long-term plans, forcing them to turn down projects or delay new work. Canadian construction companies have ambitious goals for new infrastructure and commercial builds, with Ontario firms targeting 1.5 million homes by 2031. BuildForce and industry analyses describe a recruiting shortfall of as many as 108,300 construction workers nationally by 2034, against a backdrop of millions of homes needed to restore housing affordability in Canada.

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Financial and Operational Impact

Longer build times mean slower cash‑in, more working capital tied up in work‑in‑progress, and more difficulty hitting annual revenue and profit targets. Persistent shortages also drive wages and overtime costs higher as firms compete for scarce talent, with wage growth in construction outpacing the overall economy in recent years. To attract and retain people, employers are offering higher starting salaries, more overtime, and richer benefits, all of which put pressure on project budgets, bidding strategies, and margins.

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HR and Legal Issues Behind the Numbers

Behind these numbers sit much larger HR and legal issues. National projections suggest roughly 1 in 5 workers will retire within the next decade, with some provinces facing especially steep cliffs. Ontario and British Columbia together account for a large share of upcoming retirements, while smaller provinces such as New Brunswick are preparing for a substantial part of their construction labour force to exit in a compressed timeframe.

At the same time, employers are still working to increase participation from women (accounting for only 13.6% of tradespeople in 2024), Indigenous people, and newcomers, groups that remain underrepresented in many trades. This creates both an opportunity and an obligation to review recruitment practices, equity commitments, and workplace culture through an HR–legal lens.

The skills mismatch adds another dimension. Many firms report a surplus of unskilled or semi‑skilled workers relative to demand, but a shortage of certified trades, forepersons, and supervisors who can manage complex projects safely and efficiently. Government‑funded training programs, apprenticeships, and upskilling initiatives are expanding, but they take time to translate into fully qualified workers on site.

In parallel, retention remains a challenge: 28% of businesses cite retaining skilled employees as a major problem. Long hours, overtime, and physically demanding conditions contribute to burnout, injuries, and turnover. When workloads, safety obligations, and overtime rules are not managed carefully, companies increase their exposure to safety investigations, grievances, and potential legal claims related to employment standards and occupational health and safety.

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Tech: Volatile Headcount, Rise of Automation

Canada’s tech sector has degraded recently from years of rapid, venture‑fuelled expansion into a phase marked by layoffs, restructuring, and more cautious hiring as funding conditions tightened and interest rates rose, a trend tracked in detail by BetaKit. CompTIA’s State of the Tech Workforce Canada 2025 notes that Canada still employed more than 1.4 million tech workers in 2024, but growth has slowed and become uneven across regions and subsectors.

What’s worse is that job postings for tech roles in Canada have dropped significantly since 2020, even as certain hubs like Vancouver and Toronto continue to show long‑term growth. The result is an industry where employers are tightening headcount and rebalancing teams, while many workers face a more crowded and competitive market than during the pandemic boom.

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HR–Legal Risk in Constant Change

The pace of change has amplified the consequences of getting people decisions wrong. Frequent reorganizations, the push for AI technology, and shifting product roadmaps mean employees are more likely to experience changes in duties, reporting lines, and compensation, or to be laid off as priorities evolve. 

When these changes are not documented carefully, aligned with provincial employment standards, and assessed against common law notice requirements, companies increase their exposure to wrongful dismissal and constructive dismissal claims, as well as disputes over bonuses, commissions, and equity payouts. In an environment where many employees receive a large portion of their compensation through variable pay and stock‑based incentives, clarity around how terminations and role changes affect those entitlements becomes a foundational legal and financial question rather than a minor policy detail.

The distributed nature of tech teams adds another layer of complexity. Many Canadian tech firms now employ staff across multiple provinces and, in some cases, across borders, creating a mosaic of rules around hours of work, overtime, vacation, statutory holidays, and protected leaves. Employers must ensure that policies and practices comply with the most protective applicable standards, even when teams collaborate across time zones and jurisdictions. 

At the same time, remote work increases exposure around data privacy, cybersecurity, and confidentiality, because employees may access sensitive systems from home networks or shared spaces. Employment contracts, handbooks, and remote‑work policies therefore need coordinated input from HR, legal, and finance to remain enforceable, cost‑effective, and aligned with the company’s risk appetite.

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Evolving Employee Expectations

Employee expectations in tech continue to evolve alongside these structural shifts. Employees across all industries now prioritize mental health benefits, access to counseling, and psychologically safe workloads as much as they value salary or equity. Others require accommodations for disabilities or neurodiversity that affect how, when, and where they can work, which engages human rights obligations and duty‑to‑accommodate requirements. 

Moreover, companies attempting to recalibrate their remote or hybrid models — such as by encouraging more in‑office days — must manage these changes carefully to avoid allegations of unequal treatment or constructive dismissal if new expectations fundamentally alter the employment relationship. Missteps in these areas don’t just affect culture; they can quickly escalate into legal disputes and reputational damage among a talent pool that is highly networked, skilled, and vocal online.

Taken together, these dynamics mean that every major HR decision in tech — from performance management and restructuring to compensation design and remote‑work policy — has immediate legal and financial implications. An integrated approach that aligns HR practices, legal compliance, and financial planning is increasingly necessary to navigate this environment without eroding trust, incurring unnecessary liability, or undermining the company’s ability to attract and retain key talent.

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Professional Services: Growing, But Under Pressure

Professional services firms sit at the centre of Canada’s shift toward a knowledge‑based economy, providing legal, financial, engineering, IT, and advisory support to virtually every sector. There’s been a steady growth in headcount and revenue over the past several years, yet now the industry operates under tighter client budgets, rising expectations for flexibility, and a more demanding regulatory and risk environment. This makes how they manage people — hiring, workload, hybrid work, and exits — not just an internal HR concern but a major driver of profitability, compliance risk, and long‑term firm value.

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Size and Growth of the Sector

Professional services in Canada represent one of the fastest‑growing knowledge sectors in the country, driven by population growth, digital transformation, and regulatory complexity across industries. In Ontario alone, professional, scientific, and technical services employed about 828,300 people in 2023, accounting for 10.5% of the province’s workforce and contributing $74.4 billion or 8.6% of provincial GDP. Employment in this sector grew 3.5% in 2023, outpacing overall provincial employment growth and extending a multi‑year trend where professional services consistently grow faster than the broader economy.

This pattern is mirrored in Atlantic Canada, where the sector employed around 78,600 people in 2023, representing 6.5% of total employment, and is expected to grow at an average of 2.7% annually between 2024 and 2026, again outpacing overall employment growth. The Job Bank’s Atlantic Canada profile notes that growth exceeded 10% per year in 2021 and 2022 before cooling to 3.0% in 2023, underscoring that demand remains strong but more normalized after the post‑pandemic surge. A broader industry focus estimates roughly 140,000 employer establishments in Canada’s professional services sector, generating about $259 billion in annual revenue across accounting, legal, engineering, consulting, IT, advertising, and related services.

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Workload, Margin Pressure, and People Risk

Despite strong top‑line growth, it’s common to see professional services firms experiencing margin pressure as clients push for fixed‑fee or value‑based pricing, more transparency, and demonstrable ROI on advisory spend. BDC’s Canada 2026 economic outlook anticipates a period of slower overall growth and elevated borrowing costs, which makes corporate clients more selective and price‑sensitive in their use of consultants, law firms, and agencies. 

At the same time, market research on the management consulting services segment projects continued revenue growth — on the order of mid‑single‑digit annual increases — suggesting that demand is shifting rather than disappearing, with more emphasis on technology, transformation, and risk‑related mandates.

This combination of robust demand and pricing pressure intensifies people risk. Traditional billable‑hours models and client‑driven deadlines often translate into long working hours, high utilization expectations, and uneven workloads, especially in law and consulting. Survey data and firm‑level reporting in these sectors consistently point to burnout, stress‑related attrition, and mental‑health claims as rising concerns, particularly among mid‑level professionals and associates. When firms fail to manage these pressures through staffing levels, workload allocation, and supportive policies, they not only risk losing key talent but also increase exposure to harassment complaints, toxic‑workplace allegations, and disability‑related leaves that are costly to manage and can damage reputation.

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Hybrid Work, Compliance, and Talent Competition

Hybrid and remote work have become entrenched in professional services, particularly in consulting, IT, and parts of legal and accounting, where knowledge work can be done from almost anywhere. This creates a more flexible talent market but also raises compliance complexity: firms must manage confidentiality, data security, and conflicts of interest when staff work from home networks or client sites, and they must ensure that hours, overtime, and leaves comply with provincial employment standards even when work is done off‑site.

Regulators and professional bodies increasingly expect formal policies, documented training, and clear accountability around remote work, information handling, and client confidentiality, making these issues inseparable from HR and legal strategy.

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Competition for experienced professionals in Canada remains high, especially in knowledge‑based roles, and professional services sits squarely in that tight labour market. Recent labour‑market and employer surveys report low unemployment for skilled professionals and persistent difficulty filling specialized roles, even as overall hiring intentions soften, which keeps experienced accountants, lawyers, engineers, consultants, and IT specialists in a strong position.

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Retention now depends on more than pay: employers consistently cite workload sustainability, flexibility, development opportunities, and culture as critical to keeping top performers, while workers say they are willing to move if those elements are lacking. When performance management is weak or terminations are informal, firms increase their risk of wrongful dismissal disputes, human‑rights complaints, and reputational fallout — particularly in a sector where departing professionals are well‑networked and visible.

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Overall, this points to a sector that is growing in scale and importance, but where decisions about workload, hybrid work, and talent management are now central business‑risk and profitability issues, not back‑office concerns. In this environment, integrating HR, legal, and financial expertise is becoming essential for professional services firms that want to protect margins, stay compliant, and maintain the calibre of workforce their clients expect.

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