Question Period Note: Modular Housing / Construction

Can the prefabricated homes industry support the Government of Canada’s target to build more homes?

• This government will boost Canada’s housing supply and double the pace of construction by supporting innovative approaches to homebuilding.

• Modern methods of construction, such as prefabricated and modular housing, can cut build times in half, lower costs, and improve energy efficiency.

• Through strategic investments and policy, the Government of Canada will galvanize Canada’s construction industry, spurring the building of housing using advanced materials and innovative methods. This will boost productivity and scalability while cutting costs, time, and impacts on the environment.

The Canadian Modular Housing Industry

• In 2022, the modular home industry generated approximately $2.3 billion in revenue and had approximately 7,500 employees. In 2024, the Canadian modular construction sector was valued at $5.1 billion Canadian dollars, representing 7.5% of the overall Canadian construction market.

• Modular construction in Canada is expected to grow at a Compound Annual Growth Rate of 5% through 2029, reaching approximately $6.4 billion by 2029, driven by the lodging, education, and multifamily segments.

• Canada produces only around 2% of homes through off-site methods, well below the sector’s potential and much lower than Sweden and Japan where off-site construction represents 45% and 15% of housing starts, respectively.

• Most modular home industry employees work in enterprises located in Ontario, British Columbia, Quebec and Alberta.

• Employment growth was significantly higher in the modular home industry compared to the residential building construction industry.

• There are remaining structural challenges to catalyzing the modular housing industry, including reliable financing, insurance and inter-provincial transportation.

Existing Financing Initiatives Supporting Modular and Prefabricated Housing

• The Government of Canada’s Housing Design Catalogue provides standardized, region-specific home designs (rowhouses, fourplexes, sixplexes, and accessory dwelling units) that make it easier and faster for communities to add diverse housing options within existing neighbourhoods.

• Next Generation Manufacturing Canada is administering the Advanced Manufacturing Homebuilding Challenge (AMHC) with $50 million in federal funding over two years, starting in 2024-25, alongside $150 million leveraged from industry, for a total of $200 million in housing innovation investments. A further $250 million over three years will support a second intake of AMHC and fund additional modular, prefabrication, and other homebuilding innovations.

• Regional Development Agencies received $50 million starting in 2024-25 through the Regional Homebuilding Innovation Initiative to support local innovative housing solutions across the country. One such project is in Windsor, Ontario, where the University of Windsor is receiving $2 million to use new 3D printing technology for the construction of a net-zero student residence.

• The Affordable Housing Innovation Fund is a $615 million fund to provide funding to innovative building and financial models, such as modular and prefabricated construction, the resources to generate and test new ideas and explore better ways of meeting housing challenges.

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