Unlocking the Potential of Prefabrication in Canada’s Construction Industry
Canada Mortgage and Housing Corporation (CMHC) Housing Supply Challenge SUCCESS!
September 20, 2024
The construction industry in Canada is at a crossroads.
Labour shortages, rising material costs, and the urgency of delivering housing and infrastructure at unprecedented speeds are driving a shift away from traditional building methods. Prefabrication—where building components are manufactured offsite and assembled on location—is emerging as a solution to these challenges, offering faster construction timelines, cost savings, and improved quality control.
Scius Advisory has conducted a comprehensive study to map Canada’s construction prefabrication sector, identifying 830 companies operating across 1,028 locations nationwide. This research establishes a critical baseline for understanding the industry’s composition, strengths, and growth potential. To support industry stakeholders, Scius has also developed an interactive dashboard, the Construction Prefabrication Navigator, showcasing the study’s findings, now available on Scius’s website.
A Growing Sector with Diverse Applications
Prefabrication is not new to Canada’s construction landscape—precast concrete has long been used in bridges and large commercial buildings and home building kits (such as the Sears catalogue homes) have been around since the first half of the last century. However, the advent of digital technologies such as building information modelling (BIM) and advancements in mass timber and modular building systems are expanding prefabrication’s role in residential and mid-rise construction.
Key findings from the study include:
- Companies involved in Canada’s prefab sector employ approximately 184,803 workers and generate $88.9 billion in revenue annually. Wood is the dominant material used in prefab products. 64% of Canadian prefab facilities mostly use wood, followed by 29% that primarily use steel and 13% are precast concrete companies that serve the building industry.
- Ontario, British Columbia, and Quebec are home to the highest concentration of prefab companies, but operations span every province and in most of the territories.
- Prefabrication is used across all major market segments. 68% of Canada’s prefab facilities serve the residential sector. 56% supply commercial projects, 35% work on industrial applications and 22% are involved with institutional projects. 76% of the plants serve more than one market sector.
Regional Strengths and Emerging Trends
The study also highlights key regional trends. Quebec has the most facilities involved with wood-based prefabrication, Ontario dominates steel and concrete prefab, and the Prairies demonstrate the most diverse mix of materials and product types. Prefabrication is particularly valuable in remote and northern communities, where traditional construction faces logistical and seasonal constraints. Modular construction—such as prefabricated housing units—is increasingly being deployed for Indigenous housing initiatives and workforce accommodations in resource-based industries.
Barriers to Adoption: Standardization, Procurement, and Financing
Despite its advantages, prefabrication adoption in Canada faces several hurdles:
- Lack of standardized regulations: Prefabricated components must navigate a patchwork of municipal building codes, increasing costs and limiting scalability. The inconsistent application of the CSA A277 certification process adds further complexity.
- Procurement and financing limitations: Traditional procurement models often favour conventional construction methods, making it difficult for prefab manufacturers to be engaged early in the design phase. Prefabrication requires early involvement of key project team members and significant upfront capital investment, a challenge under existing financing structures.
- Competition from international markets: Prefabricated products from the U.S. and China, where economies of scale drive lower production costs, pose a competitive challenge to domestic manufacturers.
The Future of Prefabrication in Canada
To unlock the full potential of prefabrication, industry leaders and policymakers must collaborate to:
- Adapt procurement models to incorporate prefabrication earlier in the project lifecycle.
- Invest in automation and digital integration to enhance efficiency and cost competitiveness.
- Standardize building codes and certification processes to facilitate broader adoption.
- Support workforce development programs to expand prefabrication skillsets within the construction sector.
Scius Advisory’s research and interactive dashboard provide valuable insights into the evolving landscape of prefabrication in Canada.
By leveraging this data, industry stakeholders can make informed decisions to accelerate the adoption of prefabrication, improve productivity, and drive sustainable construction practices.
Explore the Construction Prefabrication Navigator and stay updated with industry analysis in our Insights section.
