Modular wood construction could unlock 500 Million board feet of new timber demand in Canada

Published on June 10, 2026 Time: loading...

Modern multi-story residential building with an exposed timber-like framework, set in a landscaped courtyard with people walking nearby.

Canada’s forestry and construction sectors could see a significant boost in domestic wood consumption if barriers limiting modular and prefabricated building methods are addressed, according to a new industry-supported report.

The analysis suggests that more than 500 million board feet of additional timber demand could be generated under current housing construction levels. The opportunity is linked directly to wider adoption of factory-built wood construction systems across the residential sector.

The findings were highlighted by Eric Johnson, Senior Vice-President of Federal Government Relations and Communications at the Forest Products Association of Canada (FPAC) and the Canadian Wood Council (CWC). The underlying market assessment was developed by the Canadian Wood Council and referenced in a report published by the Canada West Foundation (CWF).

According to Johnson, the primary obstacles facing wider adoption are not technical. Regulatory and organizational challenges remain the most significant barriers.

Building code inconsistencies are a concern. Municipal interpretations often vary. Approval processes can also be lengthy. These factors can slow project delivery and reduce industry confidence in adopting newer construction approaches.

Industry stakeholders argue that removing these constraints could unlock substantial market growth for wood-based housing systems. Current estimates indicate that more than 500 million board feet of additional domestic demand could be created without increasing overall housing starts.

The findings stem from a December 2025 industry roundtable organized by FPAC and the Canadian Wood Council. Forestry leaders and construction professionals gathered to examine strategies for increasing wood utilization within residential development.

Participants focused on a category known as Modern Methods of Construction, commonly referred to as MMC. This includes prefabricated, modular, and panelized building systems that are manufactured in controlled factory environments before being assembled on-site.

Supporters of the approach point to several advantages. Material efficiency can be improved. Construction waste can be reduced. Skilled labor shortages may also be addressed more effectively through factory-based production.

Johnson believes low-rise and mid-rise housing applications present the strongest opportunity for expansion. These building types are considered particularly well suited to repeatable manufacturing processes and accelerated project delivery schedules.

He described this segment as the ideal range for wider adoption. Housing forms within this category can often be standardized more easily. Production efficiency is increased. Delivery timelines can be shortened.

The discussion comes as interest in mass timber and prefabricated construction continues to grow across Canada. Several organizations are actively investing in research and development initiatives aimed at expanding the use of engineered wood products.

Among them is architecture firm Perkins&Will. The company has been involved in the development of prefabricated mass timber housing solutions through support from DIGITAL, Canada’s Global Innovation Cluster for Digital Technologies.

Recent updates to Canadian building regulations have also created new opportunities for wood-based construction. Current code provisions permit unenclosed mass timber structures up to eight stories in height. Enclosed mass timber buildings can now reach 18 stories.

These changes have been viewed as important milestones for the industry. Greater design flexibility has been introduced. More residential projects can now incorporate advanced wood systems.

Perkins&Will has indicated that the revised regulations help streamline project delivery while supporting efforts to reduce embodied carbon in new developments.

However, some construction leaders caution that modular building methods alone cannot solve broader housing affordability challenges.

Joe Geluch, President of North Vancouver-based Naikoon Contracting Ltd., has noted that modular construction can reduce carrying costs through faster project completion. Schedule compression can generate savings of approximately 10 to 15 percent.

Yet he emphasized that many housing expenses remain outside the scope of construction efficiency improvements. Land acquisition costs remain significant. Development charges continue to rise. Financing expenses are increasing. Regulatory processes also contribute substantially to project costs.

According to Geluch, these factors account for a large share of total housing expenses. Even highly efficient building systems cannot fully offset those economic pressures.

The affordability challenge was also highlighted during the broader industry discussion. Vancouver developer and retired architect Michael Geller pointed to the growing disconnect between household purchasing power and housing development costs.

Land prices continue to increase. Municipal fees are rising. Construction expenses remain elevated. Wage growth has not kept pace with many of these cost drivers.

Economist Jack Mintz from the University of Calgary’s School of Public Policy connected long-term housing solutions to productivity improvements and greater capital investment. He suggested that stronger investment in innovation and construction efficiency will be necessary to address structural challenges within the housing market.

Despite differing views on affordability, industry stakeholders largely agree on the potential benefits of expanding modern construction methods. Increased productivity is expected. Material utilization can be optimized. Domestic manufacturing activity may also be strengthened.

For Canada’s forestry sector, the projected increase in timber consumption represents a significant economic opportunity. The potential demand increase is not dependent on additional mill capacity. Instead, it is tied to broader adoption of wood-based building systems and the removal of regulatory barriers that currently limit implementation.

As housing demand continues to rise nationwide, proponents believe modern construction approaches could play a larger role in meeting future needs. If adoption barriers are addressed, the sector could unlock substantial new demand for Canadian wood products while supporting faster and more efficient residential development.