CaDCR staff writer
Canada is not building homes quickly enough to meet rising demand, and red tape combined with low productivity is intensifying pressure on the construction sector, concludes a new report from the C.D. Howe Institute.
Building Smarter, Faster: Technology and Policy Solutions for Canada’s Housing Crisis explores how innovative construction technologies could help accelerate delivery and improve efficiency — if supported by the right policy conditions.
The Canada Mortgage and Housing Corporation (CMHC) estimates that to restore 2019 affordability levels, the country needs between 430,000 and 480,000 new housing starts annually. However, only 245,000 homes were started last year. Labour shortages, weak productivity in residential construction, and slow permitting processes are making it harder to close the gap.
Innovative methods — including modular, panelized, mass timber, and 3D-printed construction — could improve productivity and accelerate housing delivery. But adoption in Canada remains limited due to high upfront costs, fragmented regulations, and a lack of domestic performance data.
Report author Tasnim Fariha says technologies such as modular and panelized systems, along with mass timber, can enhance labour productivity. While not a silver bullet, they offer tools to help increase housing supply and address workforce constraints.
“Canada is facing a growing labour shortage and serious construction productivity challenges, which could have long-term consequences for our economic growth,” says Fariha, Senior Policy Analyst at the C.D. Howe Institute. “This kind of innovative construction addresses these challenges by allowing workers to produce more within the same amount of work hours.”
Compounding the pressure, nearly 260,000 construction workers are expected to retire by 2030. Factory-based approaches, the report notes, can shift up to 60 percent of the building process off-site, allowing for greater control over costs, timelines, and labour requirements.
“Scandinavian countries like Sweden have made extensive use of modular and mass timber construction, backed by coordinated policies and supply chain support,” says Fariha. “In comparison, Canada has moved slowly, with fragmented standards and limited incentives for adoption.”
The report does not recommend any single solution but urges all levels of government to create conditions that foster innovation. That includes targeted financial tools to attract investment, streamlined permitting, harmonized building code interpretations, and enhanced workforce training.
“The vision must go beyond funding,” Fariha concludes. “To build smarter and faster, we need to modernize the rules and support systems that shape how homes are built.”
For more information, contact: Tasnim Fariha, Senior Policy Analyst, C.D. Howe Institute; Raquel Schneider, Communications Officer, C.D. Howe Institute, 647-805-3918, rs********@****we.org.
The C.D. Howe Institute is an independent not-for-profit research institute whose mission is to raise living standards by fostering economically sound public policies.
