Canada’s sweeping plan to double homebuilding over the next decade is drawing cautious optimism, with experts saying Ottawa is right to invest in new construction methods — but warning that missing details, shaky consumer confidence and a looming labour crunch could stall progress before it begins.
Royal LePage CEO Phil Soper says the government’s investment in modular construction is a critical early move, especially given Canada’s weak manufactured-home sector.
“It would build two birds with one stone. It would allow us to produce housing more quickly and efficiently, plus potentially create an export industry, given we’ve got an abundance of raw materials,” he said. “And hit price points that potentially can’t be reached by traditional building methods.”
Soper tells REM the plan gets the ball rolling, but the real test will be whether builders feel confident enough to move forward.
“Without a trade deal, some people will still feel too uncomfortable making a major decision like buying a house,” he said. “It’s not a problem with incentives or government policy right now. It’s a problem with consumer confidence.”
Big ambitions, few details
In mid-September, Prime Minister Mark Carney announced $13 billion for the Build Canada Homes program, which aims to double the number of new homes built annually to 500,000 over the next decade. In 2024, there were 245,000 housing starts. The highest number ever recorded was 260,000 in 1974.
So, how will the government reach new levels of housing creation that the country has never seen? Right now, the details are hazy. The government has set out to create 4,000 new homes using new methods of construction, such as prefabricated construction, in which building takes place off-site before the structure is transported to its final location. Those homes will be on federal lands in Dartmouth, N.S., Longueuil, Que., Ottawa, Toronto, Winnipeg and Edmonton.
But a few thousand homes are a drop in the bucket of its master plan. It appears the government hopes to rely mostly on the private development industry to do the building, spurred on by incentives, funding and fast-tracked processes.
Private sector likely to carry most of the load
“I’m not totally clear on how much (the federal government) is going to build and how much they’re going to leave to the private sector,” said Robyn Brown, the Canada East lead of placemaking at consultancy Arcadis. “I get the impression a lot more will go to the private sector.”
Brown said it may be more effective for Ottawa to lean on private builders rather than attempt to become a developer. Instead, she said the federal government should focus on social housing, which the private sector has not taken up in significant numbers.
Brown is also concerned that the plan focuses too heavily on large-scale projects at the expense of smaller municipalities and towns. She noted there is no clear breakdown of how the $13 billion will be allocated, raising questions about how much impact the spending will have and whether it will reach communities where the government has the most control and can achieve the greatest value.
She said scaling up prefabricated and modular construction will also be a major challenge.
“It’s going to be a challenge,” she said. “It is essentially industrializing housing… It’s going to take some investment.”
Labour shortage looms over construction goals
Labour is another major concern. Deloitte Canada found that to double new home construction, the industry would need up to 290,000 more workers by 2030. Even with a 10 per cent productivity boost, Canada would still need about 264,000 additional workers — more than Alberta’s entire construction labour force, the report says.
Public infrastructure ambitions compound the problem. In total, Deloitte estimates the government will need up to 520,000 additional workers, or roughly a one-third increase from the 1.7 million employed in construction today. That’s not taking into consideration retirements, which are predicted to be about 15 per cent of 2024’s labour force by 2034.
“We need to figure out where all these workers are going to come from,” Trevin Stratton, a co-author of the report and a partner at Deloitte Canada, tells REM. “That needs to be a very important part of the strategy going forward if we’re going to achieve our grand ambitions.”
Stratton said it is a daunting challenge but not insurmountable, noting that the government could tap into existing labour pools and draw them into the industry, ensure that younger Canadians are entering the industry, increase the number of women and prioritize certain skill sets with the lower amount of immigration Canada is bringing in. Technology could also play an important role in increasing productivity, he noted, such as following through with prefabricated and modular construction.
“It is doable if we have the right plan.”
Eric Stober has over 10 years experience as a journalist and writer at publications big and small, including Global News, Toronto Life, Post City Magazine, Greencamp.com, the Toronto Star and The Grid.