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Canada’s housing crisis isn’t simply about demand or high interest rates—it’s deeply rooted in how homes are constructed. A recent C.D. Howe Institute report reveals that Canada’s housing shortfall stems from outdated, fragmented, and low-productivity construction methods that haven’t modernized to match growing needs. One glaring symptom of this mismatch is “permitting purgatory”: Canada takes nearly 250 days to issue a general construction permit—second-slowest among OECD countries, only ahead of Slovakia—putting all housing-supply efforts at a bureaucratic disadvantage from the start.
Even with labour supply ramping up—residential construction workers grew by 26% between 2020 and 2023—productivity has fallen, creating a paradox where more hands on deck yield fewer homes built per hour. This challenge is compounded by a looming demographic shift: about 245,000 skilled construction workers are expected to retire by 2032, requiring nearly 300,000 new workers to keep pace with population growth. Without industrialized building methods (like prefabrication or modular construction), traditional apprenticeship efforts alone can’t fill the gap.
Yet the solutions exist. Modular and off-site building methods—volumetric modules, panelized systems, hybrid “kit-of-parts” approaches, and mass-timber techniques—can cut construction timelines by up to 50% and reduce costs by about 20%, according to McKinsey analysis. However, institutional barriers—longer permitting for off-site builds, inconsistent rules across provinces, high development fees (up by 700%), and financing models tied to traditional builds—have stifled adoption. The article argues that to truly address affordability, Canada must overhaul permitting, financing, and regulatory systems to encourage these modern, efficient building methods.
Read the full article on: STOREYS
