Trudeau Pushes for Prefabricated and Modular Homes to Address Canada’s Housing Shortage

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Canadian Prime Minister Justin Trudeau is advocating for modular and prefabricated homes as the solution to meet his country’s housing shortage.

According to CTV News, Trudeau’s government is planning to allocate more than $600 million in the upcoming federal budget to expand Canada’s housing inventory. The proposed budget will include $500 million into the Apartment Construction Loan Program to support new rental housing projects created by prefabricated and modular housing manufacturers, $50 million for a new “Homebuilding Technology and Innovation Fund” to commercialize housing technologies and materials used in the creation of prefabricated homes, $50 million towards regional initiatives seeking to modernize building practices through modular housing, mass timber construction, robotics, 3D printing and automation, and $11.6 million to standardize up to 50 “efficient, cost-effective, and livable home blueprints” that will include frames for row housing, modular homes, fourplexes and other high-density designs.

“We want to accelerate the pace of home construction to levels not seen since the end of the Second World War. To do that, we need to change our approach and adopt innovative technologies,” said Trudeau, who posted a video on X (formerly Twitter) talking up how modular home construction will work for Canada, claiming, “This is the kind of innovation that’s going to help solve the housing crisis.”

As for Canadian homeowners facing steep mortgage renewals, Trudeau said, “We will have more to say between now and the budget date on April 16, and perhaps we will save it for April 16. But we have lots more to say because we recognize that the solution on housing is not any one thing.”

Earlier today, RBC Economics issued a study that warned more than half – one million – of 1.9 million new Canadian households by 2030 will not be able to buy a home if affordability remains close to where it is today, while more than 40% of the new households that can’t buy a home will also not earn enough to afford rent at the market price.

“The pace of housing construction would need to jump by nearly half in Canada just to meet future demographic growth,” the report stated. “If building new housing were only relied upon to meet future demand, housing completions would have to rise from an average of 218,000 in the past three years to about 320,000 annually over the 2023-2030 period (accounting for a normal rate of attrition in the existing stock). Higher deliveries would need to happen in the near term given our expectation for peak population growth in 2023-2024.”

“However, the construction industry has a capacity issue,” the report added. “The level of housing production needed is far above anything ever achieved in Canada. The all-time peak for completions was 257,000 in 1974. The 47% increase needed from recent levels would seriously conflict with production capacity limits. Much of it has to do with labor constraints. Builders already struggle to attract and retain workers. The job vacancy rate in the construction sector (5.1% in Q3 2023) is among the highest across Canadian industries. This could be difficult to resolve over the longer term.”