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 new approaches for building houses.

• Prefabricated and modular housing can cut construction time in half, while costing less and being more energy efficient than traditional methods.

• The Build Canada Homes initiative will foster innovative techniques and financing tools to reduce construction time and streamline regulations for prefabricated and modular homes.

Build Canada Homes

• Under the Build Canada Homes proposal, financing will be provided to speed up homebuilding and lower costs, with a focus on modular and prefabricated construction. The proposal also includes regulatory streamlining, such as simplifying building codes and pre-approving standardized designs.

The Canadian modular housing industry

• In 2022, the modular home industry generated approximately $2.3 billion in revenue and had approximately 7,500 employees.

• 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% to 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.

Existing Financing Initiatives Supporting Modular and Prefabricated Housing

• Canada Mortgage and Housing Corporation’s (CMHC) Housing Design Catalogue provides standardized, region-specific home designs (e.g., rowhouses, fourplexes, 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, 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. For example, the Federal Economic Development Agency for Southern Ontario invested $2.5 million in BECC Modular to enhance its manufacturing capabilities, enabling the production of up to 2,200 modular housing structures per year.

• The Affordable Housing Innovation Fund (AHIF) 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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