Canada’s housing crisis: Innovative tech must come with policy reform

Earlier this year, the Canadian government released a new housing plan aimed at building more homes and addressing housing unaffordability. As part of that plan, Prime Minister Justin Trudeau announced that $600 million in funding will be provided to build homes cheaper and quicker using “innovative technologies.”

The funding is earmarked for building more housing, including prefab and modular homes, by automating processes and using materials like mass timber construction, robotics and 3D printing.

With the possibility of accelerating house delivery and lowering environmental impacts, this investment marks major progress toward addressing Canada’s housing crisis. Modern methods of construction (MMC), like those the government is funding, aim to improve efficiency, sustainability and affordability in the building sector using innovative technologies.

However, fixing Canada’s housing issues requires a multifaceted strategy beyond funding innovative construction technology. A holistic solution must include policy reforms that bridge the gaps between federal and provincial governments, the industry and other stakeholders.

Emerging technologies

Using modern construction methods such as prefabrication and modular construction to build components offsite can result in significant savings in costs and time and markedly reduce carbon emissions. Building materials like mass timber, including cross-laminated timber (CLT), offer a renewable low-carbon substitute for conventional materials, reducing a building’s carbon footprint.

One study from the Netherlands indicates that 3D concrete printing can reduce material waste by up to 90 per cent, representing a significant transformation in sustainable construction practices. In addition, rapid, customized construction made possible by 3D printing can also reduce labour costs.

These modern methods have been successful internationally, producing quality construction that is quickly completed. However, systematic obstacles like governmental inertia and mismatched incentives must also be tackled to unlock their full potential in Canada.

Canada’s housing challenges

One major obstacle to building more homes quicker in Canada is the prolonged regulatory clearance time. Project approvals take up to three times longer than in the United States. In 2020, Canada ranked 37 out of 38 for municipal approval process in the Organisation for Economic Co-operation and Development.

Canada’s housing is among the least affordable in the world. Restrictive zoning policies further intensify housing shortages and hinder the ability to build high-density and mixed-use buildings near transportation hubs.

Another challenge comes from fragmentation in government responsibilities. Inadequate co-operation between different orders of government is causing demand for housing to exceed availability.

Even if Canada’s housing plan supports innovative building techniques, implementation can be challenging due to high upfront costs for materials.

Piecemeal solutions or standalone initiatives cannot address the housing crisis. Canada needs a holistic and multi-stakeholder approach that bridges the gaps between federal, provincial and municipal governments, and includes the active participation of industry stakeholders and local communities.

Proper intergovernmental co-operation is vital. Municipalities must be empowered with the resources and policy tools to fast-track approvals, reduce costs for nonprofit housing developers, and implement progressive policies that allow for more density and inclusionary zoning.

Canada can only build more equitable housing if governments commit to policy reforms that address exclusionary zoning. Furthermore, reducing speculative activity in the housing market is critical. Doing so should include taxing profits from quick property sales, implementing restrictions so housing remains accessible to people searching for homes rather than investors, and increasing investment in social housing.

Provinces also play a critical role in housing through land use planning, building codes and funding affordable housing. However, misaligned provincial and federal priorities often cause delays. Better co-ordination can streamline approval process and accelerate housing delivery.

A federally-led framework

A multifaceted plan that links governments, industries and people under a common goal is crucial. The federal government’s role in health care could provide a template for how Canada can develop better housing policies. Health care, like housing, is a provincial mandate. However, under the Canada Health Act, provinces receive federal funding through transfers. To receive funding, they must comply with principles like universality and accessibility.

Canada should develop a federally-led framework that ties funding to measurable outcomes, implementation of zoning regulations and reductions in approval timelines.

Currently, zoning and development approvals differ significantly across municipalities, creating inefficiencies and delays. A unified approach could harmonize these processes, streamline approvals and incentivize municipalities to adopt progressive policies around inclusionary zoning and higher-density neighbourhoods. Establishing a single housing framework based on values like equity, affordability and accessibility, would promote implementing such policies nationally.

Canada’s current National Housing Council (NHC) serves an important advisory role focused on providing recommendations, however its mandate is limited. Its current scope does not include active co-ordination between federal, provincial and municipal governments or addressing the systemic inefficiencies in zoning, funding and approvals.

To meet the challenges of Canada’s housing crisis, the NHC’s mandate should be expanded to include facilitating active intergovernmental collaboration. With such a mandate, it would be empowered to promote intergovernmental co-operation to harmonize zoning regulations, simplify approvals and lower administrative delays.

Local communities need flexible financing to handle particular housing issues in rural, suburban and metropolitan areas.

Crucially important is scaling up modern methods of construction. To do so, Canada should develop comprehensive guidelines for prefabricated, modular and 3D-printed housing. This must be accompanied by research and development incentives to ensure their swift adoption and effective integration into the construction sector.

This unified approach, underpinned by federal leadership and collaboration can transform housing from a privilege to an accessible right for all Canadians.