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With his $26 billion Build Canada ɫɫ��s (BCH) agency, which goes into operation this fall, Ottawa hopes to increase production of innovative housing types including prefabricated, modular, panelized and mass timber housing.

Factory-built housing can be 50 per cent faster to build and 20 per cent cheaper, but it has struggled with only intermittent demand and a lack of financing.

And Carney seeks to revitalize a Canadian forest products industry that has been suffering for years with high U.S. tariffs, and is bracing for a tariff hike to 35 per cent from a current 14.4 per cent.

So, Carney last week rolled out a $1.2 billion federal funding package to ensure that Canadian wood products are used in his BCH initiative. The package also includes R&D funding to develop new products, such as mass timber structures and insulation made from wood fibre used in prefab homes to reduce energy costs.

So far, housing is the most advanced of the nation-building projects that Carney has under consideration. It will also have a wide impact, affecting most Canadians.

“We will create an entirely new Canadian housing industry,” Carney has said of his multifaceted housing strategy.

But the challenge with a project of this size and geographic scope, which has potential to build about 2.5 million homes from coast to coast, and restore 2019-level affordability within a decade, is that an enormous coalition of players will have to do their part.

They include all orders of government; thousands of municipalities; hundreds of private-sector builders; and scores of banks and other lenders and insurers resistant to funding and insuring housing types with which they are unfamiliar.

Factory-built housing is commonplace in Sweden and Japan, but accounts for less than five per cent of residential construction in Canada.

To build a bigger workforce for the Canadian industry, the BCH program includes funds for training workers on the high-tech tools and machinery used in building floors, walls, ceilings, and kitchen and bathroom units off-site, with the components later assembled at the buyer’s property.

A report last month on the potential of innovative housing types by the C.D. Howe Institute cites .

The City of ɫɫ�� has built 216 modular homes with plans for more under its HousingTO Action plan.

Modular construction has been well-suited to new student housing at Selkirk College and Trinity Western University in B.C., and the 18-storey Tallwood House at the University of British Columbia.

“Canada’s housing market is gradually adapting and embracing innovative technologies at a faster pace,” says the C.D. Howe Institute.

But high municipal development fees, cumbersome regulations, and a lack of economies of scale “restrict the supply of new homes,” the report says.

They “also make it more difficult for innovative builders to scale up and compete effectively.”

Here is a partial “to-do” list to accelerate the supply of new housing:

• The feds and provinces need to place big orders with makers of innovative housing types to cover periods of slack demand, justifying the costs of launching or expanding factory-built housing companies. “Without a consistent flow of orders, even large [builders] may struggle to maintain operations,” the C.D. Howe report says.

• Municipalities need to standardize the crazy-quilt of building codes across the country and even within municipal jurisdictions.

And they need to reduce wait times for building permit approvals, which are about three times longer than in the U.S.

Approvals in Canada take an average of almost 250 days, according to the Canadian Construction Association. The wait time in ɫɫ�� averages about 25 months.

“Until those approvals shrink, any talk of boosting supply is like running a marathon in concrete boots,” says real estate analyst Daniel Foch.

• Municipalities must also consider a moratorium on development charges and other fees that can account for as much as 25 per cent of new-house prices.

That would “improve housing affordability and stimulate construction activity,” says the C.D. Howe report. And “a more dynamic housing market will enable the industry to benefit from economies of scale.”

Here’s where the feds and provinces could step in, covering those revenue losses for, say, three years to enable builders of innovative housing to gain momentum.

• Ottawa needs to eradicate the bureaucratic inertia that delays or blocks funding for innovative-housing projects by the Canada Mortgage and Housing Corp. (CMHC) and the federal Housing Accelerator Fund.

• With the introduction of construction financing insurance by the CMHC, lenders would be more confident in funding new innovative housing developments.

“The market will naturally shift toward innovative home-building technologies,” says the C.D. Howe report, “when sufficient demand exists, and the supply side is prepared to meet it within a business-friendly environment.”