Canada launches $130 Million Federal Program to advance mass timber housing and low-carbon wood technologies

Published on June 4, 2026 Time: loading...

Modern glass building with angled, crisscrossed supports along a city street; pedestrians and cars nearby.

Canada has unveiled a $130 million federal program designed to accelerate innovation in mass timber housing, low-carbon wood technologies, and Indigenous participation in the forest sector. Natural Resources Canada confirmed the initiative on June 3, highlighting its central role in transforming the nation’s forestry industry and supporting sustainable construction.

At the forefront of the program is the $1 million Bond Tower in Winnipeg. The seven-story apartment building will trial a single-exit stair design, addressing one of the most significant regulatory barriers to mid-rise timber construction. Designed by Winnipeg firm 5468796 Architecture, the project uses a hybrid prefabricated mass timber system for 24 residential units. Officials expect the demonstration to provide a replicable, affordable model for urban housing that meets strict fire safety and building standards.

Complementing this effort, a $4.8 million grant supports Intelligent City in building a Greater Toronto Area factory capable of producing up to 1,000 mass timber housing units annually. The facility will leverage robotics and automated design technology to reduce construction time while reinforcing a fully Canadian supply chain for prefabricated timber components. These projects form part of a broader package of 56 initiatives supported by the federal program.

The funding aligns with recommendations from the Canadian Forest Sector Transformation Task Force, launched in January and reporting in April. Forest ministers are expected to review the Task Force proposals during the Canadian Council of Forest Ministers meeting in Langford, British Columbia, from June 3 to 5. The program also supports small and medium-sized businesses with additional measures under the Regional Development Agencies, including a $300 million Regional Tariff Response Initiative and $100 million for regions most affected by forest-sector disruptions. Industry Minister Mélanie Joly emphasised that these investments will enable companies to pivot to new markets while maintaining operations and strengthening economic resilience.

The Business Development Bank of Canada will expand its Softwood Lumber Loan Guarantee Program and launch two new direct loan programs covering timber harvesting and pulp and paper production. The forest sector employs nearly 200,000 Canadians, including over 11,000 Indigenous workers, and contributes more than $20 billion annually to the national GDP.

Since August 2025, the federal government has introduced over $2 billion in measures to stabilize and modernize the forestry industry. This includes a $500 million renewal of transformation programs to help the sector adjust to U.S. trade actions and tightening fibre supply. Among the new grants, $14.9 million is allocated to the Canada Wood Group to expand exports to Japan, South Korea, and China. BC Forestry Innovation Investment will receive $13.1 million to align regulatory standards across key international markets, including China, India, Vietnam, the United Kingdom, and the European Union.

The largest single grant, $37 million, was awarded to the Forest Enhancement Society of British Columbia to redirect low-value and residual fibre, previously burned, into pulp, bioenergy, and pellet production. Other initiatives include a $7.5 million investment to retrofit Daiken North America’s Huntsville, Ontario, plant for next-generation engineered wood panel production. Xylo-carbone in Saint-Tite, Quebec, will use $4.5 million to develop a biocarbon composite capable of replacing up to 50,000 tonnes of fossil coal per year in industrial applications, including silicon production.

Indigenous-led and community projects are also prioritized. A $1.11 million upgrade supports the Papasay facility at Sand Point First Nation in Ontario, while a $510,000 investment will commission the Tackipotcikan mill in Wemotaci, Quebec. Minister Hodgson stated that Canada’s forests are a cornerstone for creating good jobs, affordable housing, and sustainable economic growth.

The program not only targets innovation in construction but also emphasizes sustainable and low-carbon materials. Prefabricated mass timber offers reduced environmental impact compared to traditional building methods. Factory-controlled production allows precise CNC processing, which supports faster assembly, higher quality, and more predictable project outcomes. Coatings for moisture stability and UV protection further enhance the reliability of CLT panels.

Natural Resources Canada confirmed that the $130 million package will be followed by an Action Plan and a broader Forest Sector Strategy, which will be finalized after forest ministers conclude their Langford talks on June 5. The initiative marks a decisive step toward integrating mass timber and low-carbon technologies into urban development and industrial applications nationwide.

By combining demonstrator projects, large-scale production, Indigenous engagement, and export expansion, Canada aims to solidify its position as a global leader in sustainable forestry and timber construction. The federal program demonstrates that timber innovation is not just about materials—it is central to economic growth, climate action, and job creation across the country.