The prefabrication industry has long been touted as a multi-solving solution to some of the housing industry’s toughest problems: We can build faster, cheaper, and cleaner while tackling labour shortages, carbon emissions, and supply bottlenecks all at once.
Prefab Panels by Collective Carpentry
In theory, it could transform housing from an unproductive fragmented regionalized economy into a coordinated, exportable and high-performance industry. In practice, Canada’s high-performance offsite builders are fighting uphill for that idealised future. They’ve proven that airtight, low-carbon homes can be factory-built and cost competitive, but face a number of systemic barriers to growth.
The financing to scale those factories and technology remains scarce (or complex), demand signals are inconsistent, supply chains are fragmented, and cultural and systemic biases create barriers to adoption and implementation, according to interviews with several Canadian high performance offsite manufacturing companies.
Forget rapid scaling, says Tanya Savas, Sales Manager at Collective Carpentry. Instead, her company opts for steady, incremental growth. Rather than massive market adoption, this organization prioritizes work that keeps its staff consistently busy, without risking the pipeline fluctuations and operational challenges inherent in accelerated expansion.
“As a prefabrication company, when you scale up, you want to make sure you have the consistent demand to support your manufacturing capacity. Otherwise, your organization could face some tough choices,” said Savas. Grants like CleanBC’s have helped them invest in equipment, but managing the detailed reporting and compliance can pose a challenge with limited staff resources.
“We’re ready to produce at higher volume, but the traditional construction world isn’t yet structured to keep up with prefab’s efficiency. That gap is what makes growth both exciting and challenging.”
Unlike automakers who can build inventory and sell when demand arises, prefab housing companies can’t stockpile completed homes; they rely entirely on a steady flow of projects to keep their operations viable, said Chris Hill, former prefab builder and president of off-site construction management firm B Collective.
“The biggest struggle with prefab is keeping the shop constantly moving, because as soon as it’s not moving, you’re losing tons of money,” says Michelle Mazzotta, CEO at Kiwi Innovations, a high-performance prefabrication home builder based on Bowen Island in British Columbia.
With visions of growing production beyond the next job, small firms struggle to keep their shops running year-round, juggling uncertain pipelines, and fragmented codes and approval processes that vary by province and even municipalities.
“Federal policies, provincial policies, municipal policies, and then differences across that entire spectrum that create enormous inefficiencies,” said Geoff Cape, CEO of Toronto-based prefabrication company Assembly.
Ottawa’s Big Bet on Factory-Built Housing
After years of facing systemic barriers and fragmented support, the industry may finally be getting the push it needs. With the launch of the federal government’s Build Canada Homes initiative with an initial $13 billion investment, the federal government is looking to finance, organize, and broker partnerships to accelerate the building of affordable housing across public lands. Its ambition isn’t just affordability but also industrial: to make factory-built and modular construction a mainstream delivery model, linking Canadian materials and manufacturers with a systemic demand for more housing across the country.
Prime Minister Mark Carney, pictured with Housing and Infrastructure Minister Gregor Robertson, pictured Sept. 14, announcing Build Canada Homes. / SOURCE
Ottawa’s plan is to fuse public land, financing, and “Buy Canadian” supply chains into an industrialized housing industry that can deliver at scale. Yet behind the hope lies a burning question (no climate pun intended): Will Ottawa’s industrialized housing projects build faster and better or will it trade performance and innovation for volume?
The government’s greening strategy calls for net-zero public assets by 2050, and while the Prime Minister pledges, in a press release, to use “wherever possible” low-carbon materials and efficient design, without firm performance criteria Build Canada Homes risks trading climate ambition for speed.
As a Special Operating Agency within Housing, Infrastructure and Communities Canada (HICC), Build Canada Homes must align with the federal Greening Government Strategy and integrate net-zero, climate-resilient design principles and apply lifecycle carbon accounting. Early signals coming out of Ottawa, however, is that the new agency will be exempt from those rules, which would be a troubling first step for fostering a high-performance off-site building industry.
Those advising the government from outside say climate mitigation should be a part of the industrialization agenda itself.
“It’s what helped build the industry in other countries. Sweden’s global leadership began because they set low carbon requirements for new building of housing, and it helped push the innovation around modular,” said Cape, convener of the Canadian Industrialized Construction Coalition (CICC).
The coalition of more than 100 companies convened by Assembly produced a policy document outlining their top recommendations to the federal government focused on improving the financing, procurement, and regulatory conditions needed to grow a domestic off-site construction industry capable of meeting Canada’s housing and climate goals.
“I am 100% confident in the fact that we were carefully listened to by the Prime Minister’s Office, by the Minister of Housing and infrastructure and by the Minister of Industry Canada,” said Cape “I am certain that several of our policy recommendations are going to land.”
The CICC urges Ottawa to create dedicated financing mechanisms, such as loan guarantees, tax credits, and investment funds, to expand domestic factory capacity, adopt new technology, and derisk offsite production. It calls for procurement reform that replaces design-bid-build contracts with multi-year agreements, minimum purchase commitments, integrated design templates, and aggregate approaches with other public builders to give manufacturers predictable demand and justify investment. Finally, it recommends the federal government support the adoption of a CSA standard for certifying offsite construction, digital permitting to speed approvals, and a fast-track system for certified designs.
In the secondary recommendations, as part of critical enablers supporting industry growth, CICC included calls to embed industrialized construction in climate and circularity strategies, leverage life-cycle emission benchmarking for factory-built housing, and align with the National Energy Code’s tiered performance framework.
If Ottawa follows through on the climate recommendations, these policies could help high-performance builders leverage factory manufacturing to deliver airtight, low-carbon homes that meet the toughest energy benchmarks.
“The principles of Passive House lend itself very well to prefab,” said Hill, a certified Passive House Trades Person. “Once you start to apply thicker walls, more insulation, expectations around sustainability are increased, and prefab becomes a very natural fit.”
Supporting high-performance builders would also turn the industry into a test bed for deeper sustainability innovation. Kiwi Innovations are already pushing beyond efficiency toward circular design, using reclaimed lumber sourced from deconstructed buildings through partners like Vema Deconstruction. Collective Carpentry ditched foam insulation and developed wood-based wall systems that reach R-55 performance.
By replacing virgin materials, cutting embodied carbon, and avoiding plastics and toxic compounds, these builders are showing how factory-built housing can advance federal priorities that go well beyond affordability, linking housing delivery to waste and plastic reduction, healthier materials, and a low-carbon economy.
“While it’s really fun to be on the leading edge and very inspiring to be on the leading edge, we’re sort of constantly dancing between success and not surviving,” said Mazzotta of Kiwi Innovations. “To have funding so that we can continue doing the research and development to advance the construction industry, that’s where we could really use federal support.”
If Ottawa gets it right, prefab could finally prove that building faster doesn’t have to mean building worse. It could be a cornerstone of the Prime Minister’s desire for a climate competitiveness strategy or reveal a blind spot in the legacy he began as Governor of the Bank of England, when he warned that climate change was the “tragedy on the horizon.”
