On the outskirts of Toronto, a bustling factory is quietly aiming at two of Canada’s most pressing challenges: the housing affordability crisis and growing economic uncertainty linked to US trade tensions.
The facility, operated by major homebuilder Great Gulf, produces prefabricated components, walls, floors, and roofs, that can be rapidly assembled into multi-storey housing. These modular units promise a faster, more efficient alternative to traditional construction methods, potentially reshaping how homes are built nationwide.
Despite its potential, the factory currently runs below capacity. The modular housing industry, long touted as a solution to Canada’s housing shortage, has struggled to gain widespread traction. Hurdles such as inconsistent local zoning regulations, unpredictable demand, and limited access to financing have kept many operators from scaling up.
Now, with a federal election approaching, the Liberal Party, under leader Mark Carney, is placing prefabricated housing at the centre of its housing strategy. The party has proposed a significant government intervention, acting as both financier and bulk purchaser of modular homes to stimulate production, lower costs, and create new manufacturing jobs, which is especially important amid a downturn in trade with the United States.
The plan includes C$25 billion in financing for modular housing factories and a further C$1 billion in equity investment. The goal is to build a sustainable prefab industry that could supply international markets, particularly if the US ramps housing construction. However, industry experts point to deep-rooted challenges. While countries like Japan and Sweden have successfully supported factory-built housing through public sector demand, Canada’s fragmented building codes and zoning rules complicate efforts to standardise production. Although the Liberals have released a catalogue of model home designs, they’ve yet to clarify how they’ll convince local governments to harmonise regulations.
Meanwhile, the Conservatives advocate a more hands-off approach, focused on cutting red tape and encouraging private development. They express scepticism about the cost-effectiveness of prefabrication.
Yet with Canada’s average home price nearing C$703,000 and housing supply lagging far behind demand, innovative approaches are gaining urgency. Modular construction, once seen as a niche option, may be on the verge of a breakthrough if political will and market conditions align.
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