Is this a case of missed opportunity?
Canada is a globally significant producer and exporter of wood products. Its main market is the US (61% of forest product exports), but Japan (9%), and China (18%) are important. In 2022 the sector generated 56,120 jobs, CAN$6.4 billion in GDP, $1.9 billion in provincial government revenue, 26% of provincial manufacturing sales and 24% of B.C.’s total commodity export value. Between 2013 and 2022 the value of Veneer, plywood and engineered wood product manufacturing increased from $1.4 billion to $3.2 billion (to 21% of total forest product sales).
Canada has policies at both the national and provincial (state) level that have supported increased use of wood products and Modern Methods of Construction (MMC.) The National Building Code was revised in 2009 to allow light frame construction up to 6 stories, and allowance for mass timber use in 7-12 story buildings was added in the 2020 building code. Many case studies of mass timber buildings are now available.
Conventional light-frame wood construction makes up the bulk of construction. Typical light-frame construction has repetitive wood framing to form rafters or trusses using standard dimension lumber. Mass timber products are thick, compressed layers of wood that serve as the load-bearing structure of a building. Because these products are lighter than other construction materials, they are used for prefabricated wood building systems.
Although a major producer of wood products a comprehensive 2021 State of Prefabrication in Canada report found:
There are three primary forms of wood prefabrication here in Canada – Mass Timber, Panels, and Volumetric Modular construction. Of these methods of prefabrication, mass timber is currently receiving significant attention due to the sustainability benefits it offers and the technical and market development efforts to encourage its use. While there are many different types of mass timber, the focus for this study is on cross-laminated timber (CLT) and Glulam structural systems. From a production capacity and market penetration perspective, mass timber in Canada still has a long way to go to reach the maturity of its European counterparts.
The report found 20 mass timber manufacturing facilities in Canada: British Columbia had 8 and 40% of total Canadian production; and Quebec had 5 facilities and 25% of overall production. Only two companies are integrated operations that harvest, mill, and offer full engineering, design, and production of mass timber structures; Kalesnikoff Lumber and Nordic Structures both transitioned to mass timber out of their milling operations. Up to 2021, 550 projects had been completed, almost half were institutional and public projects (232), the others commercial (141) and recreational projects (66). Of these 85% were 1-2 storeys, and 10% 3-6 storeys. Only 23 residential projects had been completed with the majority in southern British Columbia.
The report then looked at three types of prefabricated panels:
1. Open panels for standard Light Wood Frame construction with or without sheathing;
2. Closed panels with One Side Closed for standard light wood frame construction, with sheathing, exterior cladding, insulation, windows; and
3. Both Sides Closed for standard light wood frame construction, with sheathing, exterior cladding, insulation, windows, electrical or conduit, plumbing, heating components and interior boarding.
The open panel sector was found to be low-tech but there were several semi-automated panelized companies employing more digitization and automation using 3D modelling, automated nailing machines and conveyors and framing tables. These are used in residential building with 74% of panelized systems used for multi-family and 23% used for single-family buildings. The adoption of closed panel systems are ‘still in their infancy’, with only two large companies employing full automation in construction closed panels and most of the companies ‘small and are low-tech operations utilizing framing tables and overhead cranes within warehouses.’ Leveraging their experience and technical expertise several European and Japanese companies have entered the market and become established producers of these panels.
On modular building, the report found the residential modular market had varied between 10% and 15% of single-family residential starts in Canada, or 11,000 to 17,000 annual starts, and had approximately 30,000 full time jobs with $6bn in total economic activity (direct and indirect activity). The largest regions for demand are Quebec and the Prairies. There were an estimated 26 modular manufacturers, operating in approximately 50 locations that were typically low-tech with little automation.
The commercial industry is divided relocatable buildings and permanent modular construction (PMC) and includes industrial, hospitality, education, healthcare and multi-family buildings. It was estimated that there are 100,000 relocatable structures such as job site office trailers, classroom portables, and remote workforce accommodation in use.
Commercial PMC modular manufacturers in Canada build a variety of building types, mainly low-rise buildings under 6 stories using light wood frame volumetric construction. The main markets were portable classrooms for education and public sector multi-family buildings for affordable housing. The report noted ‘Over the past 20 years there have been many regional modular business failures, that have created pockets of reluctance from stakeholders and owners to try modular again after having seen their projects left unfinished or tied up in bankruptcy proceedings. A BC university recently completed two modular projects by two different manufacturers within a year only to see both companies unable to complete their warranty period due to bankruptcy.’
The State of Prefabrication in Canada report found a low level of automation and little investment in new technology by industry. The barriers of standardisation, acceptance by clients, procurement methods, access to finance and insurance, and the lack of a skilled workforce were identified. The eight recommendations addressed those barriers.
Policy Measures
The Government of Canada invested $5 million between 2013 and 2017 to support two demonstration projects under the Tall Wood Building Demonstration Initiative, which resulted in the construction of the world’s then tallest hybrid wood building at 18 storeys, the Brock Commons Tallwood House at the University of British Columbia in Vancouver, and the Origine green condo project in Québec (pictured above).
The Green Construction through Wood (GCWood) program was started in 2017 as a 4-year, $40mn program aimed at increasing the use of wood in construction projects and supporting Canada’s commitment to greenhouse gas emissions reduction targets under the Paris Agreement. As of March 2023, this had funded 4 tall wood building projects, 10 low-rise non-residential building projects, and 2 timber bridge projects. GCWood also facilitated the revisions to the 2020 National Building Code of Canada to allow wood buildings up to 12 storeys.
Also at the federal level, the Canada Mortgage and Housing Corporation (CMHC) announced the Rapid Housing Initiative (RHI) in 2020 which funded affordable housing and required the use of prefabricated systems to complete a funded project within 12 months. The RHI started in 2020 with $1 billion in funding, a second round of funding had another $1.5bn for 2021-22 and the third round in 2022-23 added another $1.5bn, for a program total of $4bn that delivered 15,539 units/beds.
Several provinces have a Wood Charter that promotes the use of wood in construction. Québec mandated for wood use in public buildings in 2013, and updated their Wood Charter in 2017. The share of wood-framed non-residential buildings of 4 stories or less increased from 28% to 34% between 2016 and 2020, and there is now a Policy for the Use of Wood in Construction. Alberta also has a Wood Charter, and New Brunswick a Wood First policy for public buildings. Between 2017 and 2020 Ontario had a $4.8mn demonstration program. The provinces also have started setting up training programs for timber construction with an emphasis on digital skills, Design for Manufacture and Assembly (DfMA) and Building Information Modelling (BIM).
British Columbia
The province of British Columbia (B.C.) has a large forest products industry worth $15bn in 2022, with the sawmill share well over 50% and a growing share of engineered wood products of around 20. The 2022 review of the Economic State of the British Columbia Forest Sector is here. As a result of the changes to the building code in 2009 and 2020 building code, over 90% of 1-6 storey new residential construction in B.C. is built in wood, a greater share than in any other jurisdiction in the world. In 2011 North America’s first CLT plant opened in B.C, and around 350 mass timber structures have since been built, more than half of all mass timber buildings in Canada. There is now a local cluster of experienced designers and builders that work in both domestic and export markets for mass timber.
An important policy for MMC in B.C. is the Wood First program, which promotes innovation in manufacturing, building design and construction. The Forestry Innovation Investment (FII) agency provides overall management and administration of the program and the focus areas of research, education, marketing and value-added capacity building. The FII 2023-2026 Strategic Plan is here.
Funding comes from the Ministry of Jobs, Economic Recovery and Innovation, but the activities of the Wood First program are delivered primarily by third-party organizations under a cost-sharing framework with contributions from industry. There is an annual call for proposals reviewed by an Advisory Committee, with a focus on sustainability, advanced wood technologies and building systems, and industrialization of construction through prefabrication using DfMA and BIM. As a result the FII has an extensive library of case studies and technical manuals, the current recipients are listed here.
There are two other programs that supported use of MMC. With the Rapid Response to Homelessnessprogram B.C. invested $291mn between 2016 and 2021 to build over 2,000 modular housing units for people who are homeless or at risk of homelessness. And between 2020 and 2023 B.C.’s Mass Timber Demonstration Program invested almost $11 million to help with costs associated with the design and construction of 20 building projects and 8 research projects that demonstrated emerging or new mass timber building systems and construction processes.
Ontario
The Ontario government started the Accelerated Build Pilot Program in 2020 to address capacity issues in the province’s health and long-term care (LTC) system. Infrastructure Ontario (IO) collaborated with industry to develop an innovative program for rapid procurement and modular construction. IO’s first accelerated build projects were completed in 2022. The Lakeridge Gardens LTC home was completed in February 2022, after 13 months of construction. In September 2022, the Thunder Bay Correctional Centre and Kenora Jail projects were completed. In May 2023, the Humber Meadows LTC was completed and in July 2023 Wellbrook Place with two LTC homes was completed.
There is a short documentary from PCL Construction on the Lakeridge Gardens project and the innovation involved, and Bird Construction has a short video of the Kenora and Thunder Bay correctional facility modular build projects.
Conclusion
Canada has built some of the tallest mass timber buildings in the world and most residential buildings are wood framed. There are eight producers of CLT and Glulam, however they are mainly restricted to the local market and have not developed an export market in the US, where they compete with American and European producers. In 2020 only two companies were integrated operations that harvest and mill wood, and offer full engineering, design, and production of mass timber structures. The growth in mass timber demand has been largely driven by sustainability initiatives and public policy for carbon reduction.
Revisions to the building code since 2009 increased the use of wood framing and mass timber for both residential and non-residential building, with its use now required for many publicly funded projects. There is a significant wood truss industry across the country, and light wood framing is used for most residential construction, but the industry is based on traditional trades and not highly automated, with a few exceptions.
The public sector programs by both national and province governments to use prefabricated buildings for housing and education have been important on the demand side, but much of has been low tech panelized construction or simple standardized modular buildings on the supply side. Several European and Japanese companies have entered the market and become established producers of closed panels, based on their experience and technical expertise. There is a well-established residential modular building industry for both relocatable and permanent buildings, but the cyclical nature of construction has led to the failure of many modular building companies, and this has affected private sector commercial and industrial demand.
Canada could be a classic example of aligning industry development with competitive advantage. With the natural endowments of climate and space a large and established forest products industry has developed, which exports timber to the US and Asia, and this could have been used to develop an advanced prefabricated building industry based on wood construction, creating a comparative advantage based on R&D and technical expertise. However, on the evidence available this has so far not happened. There have been demonstration projects and provinces have Wood First policies for public buildings, but prefabrication and MMC is not established as an alternative to traditional construction.
