The federal government has launched a consultation to source additional ideas on accelerating innovation and productivity in Canada’s homebuilding industry.

The consultation will engage a broad range of stakeholders across the construction sector, academics and community leaders through a series of thematic roundtables, as well as solicit feedback from the general public through online submissions.

Its goal is to identify avenues to expedite homebuilding, provide new ideas to change the way homes are built and bring down housing costs for Canadians.

“The homebuilding industry has a tremendous opportunity to build more homes to better meet housing demand from Canadians,” said Innovation Minister François-Philippe Champagne. “By working together, we can ensure Canada has the skills and environment to promote innovative solutions and tackle Canada’s housing crisis.”

The consultation will include enhancing productivity within Canada’s housing ecosystem, incenting innovation and technology adoption, exploring the impacts of access to capital, and strengthening supply chains.

A panel, comprising experts from Canada’s homebuilding sector, will support the consultation and provide advice to the government on how to boost the capacity of the industry.

The panel is composed of the following members:

• Isabelle Demers, Vice-President, Association des professionnels de la construction et de l’habitation du Québec
• Emma Kozak, Vice-President of Real Estate Lending, Royal Bank of Canada
• Kevin Lee, CEO, Canadian Home Builders’ Association
• Bryce Nugent, Director, Modular Housing Association Prairie Provinces
• Carolyn Whitzman, Adjunct Professor, University of Ottawa

The online consultation will be open until September 13.

In its housing plan, the federal government committed to supporting homebuilders. It also acknowledged the need to build homes smarter, faster and at prices Canadians can afford.

Innovative technologies, building methods and materials could support higher productivity rates, but adoption is low. For instance, only about 30% of Canadian homebuilders are using some degree of prefabrication for their projects.

The construction sector is capital-intensive, as developing a new project requires substantial up-front investment. Debt financing makes construction sector firms sensitive to higher interest rates, as interest payments currently take up 40% of the industry’s net income compared with 23% for other firms in the economy.

The cost to construct a residential building in Canada has increased by 58% since 2020, well outpacing the overall inflation rate of 15%. The supply chain was significantly disrupted by the COVID-19 pandemic and the war in Ukraine, among other global economic disruptions, and prices remain elevated.