Published: August 7, 2025
On August 5, 2025, Prime Minister Mark Carney made a bold and unprecedented move to re-anchor Canada’s softwood lumber industry in service of a bigger national vision: building 500,000 homes annually while supporting domestic workers and reducing our dependence on a volatile U.S. market.
This announcement includes \$1.25 billion in funding to increase the domestic consumption of softwood lumber, pivot from U.S.-oriented exports, and modernize housing production using Canadian timber.
This is more than just a trade policy adjustment—it’s a call for industrial transformation.
But here’s the honest truth: this pivot will only succeed if we restructure the way we build homes, train workers, and insulate ourselves from sudden reversals in trade policy, especially U.S. tariffs. Mark Carney is moving in the right direction—but unless Canadians get behind a full-scale reindustrialization effort, we may fall short.
Let’s break it down.
📉 Where We Are Today: A Heavy Reliance on U.S. Exports
Canada produces a significant amount of softwood lumber, with recent production figures fluctuating. A substantial portion of this output, historically around 90%, has been exported to the United States to fuel their housing market. This has created a major imbalance where our domestic market consumes a much smaller fraction for housing, renovations, and infrastructure.
The softwood lumber tariffs imposed by the U.S. over the last two decades have cost the Canadian industry billions, creating a cycle of uncertainty for mills and workers.
Carney’s plan proposes flipping this logic on its head—what if we consume more of our own product to address our national housing crisis?
How Much Lumber Do We Need for 500,000 Homes?
To understand the scale of this effort, consider this:
- A single-family home requires approximately 16,000 board feet of lumber, which is about 38 cubic meters.
- Assuming an average of 38 m³ per home:
- 500,000 homes × 38 m³ = 19 million m³ annually
This would require a significant increase in our current domestic consumption of softwood lumber.
This shift is technically feasible, as Canada has the production capacity. However, it requires a deliberate reallocation of lumber that currently feeds U.S. markets. We would need to redirect a substantial volume of lumber domestically while also building the factory, workforce, and logistical capacity to put that lumber to use.
Can the Canadian Market Absorb That Volume?
Short answer: yes—but not without change.
To absorb an additional 19 million m³ of lumber per year, we need to:
- Rapidly build modular and prefabricated housing factories
- Streamline municipal zoning and permitting
- Develop centralized procurement from public housing agencies
- Ensure stable lumber pricing to avoid inflationary pressure
Without new systems, the lumber won’t be used efficiently and may still be exported at discount prices or result in mill closures.
This also means building new housing types—mid-rise, multiplex, missing-middle infill, and factory-built rentals—at speed and scale.
Do We Need New Export Markets If the U.S. Drops Volume?
Yes, and here’s why.
If Canada reduces lumber exports to the U.S., we need to ensure either:
- We use it for domestic construction, or
- We find alternative export markets
Asia, India, and the Middle East represent high-potential new markets. Cross-laminated timber (CLT) and modular components can be exported more easily than raw logs.
Carney’s plan must include trade diversification—not just for economic growth but to ensure Canada isn’t left stranded if the domestic build-out slows or stalls.
What Happens If U.S. Tariffs Are Lifted?
You’d think it would be good news. But here’s the risk: if U.S. tariffs disappear, lumber prices may spike, because U.S. buyers could quickly outbid domestic builders.
This is already happening in agriculture, where U.S. buyers have disrupted Canadian supply by offering higher prices for local crops and cattle.
The housing supply goal depends on stable input prices. If lumber prices soar due to renewed U.S. demand, developers will pass that cost on to buyers.
Canada needs mechanisms like:
- Strategic lumber reserves
- Government price locks or subsidies for public housing projects
- Preferential supply agreements for affordable developments
Carney must insulate the policy from sudden reversals in U.S. behavior—or the strategy collapses under its own good intentions.
How This Impacts Real Estate Prices
The most direct impact is on new build construction costs. By increasing the supply of raw material domestically, and stabilizing pricing through government-backed supply, developers could:
- Reduce per-unit costs
- Shorten build times through prefab/mass timber
- Improve predictability for municipal housing timelines
But the resale market likely won’t see immediate changes. Most existing homeowners will remain insulated from these shifts unless provincial or municipal incentives push redevelopment of older lots into multiplexes or purpose-built rentals.
If the plan scales as intended, it could gradually flatten housing price inflation, particularly for new homeowners, renters, and developers.
Who Benefits—and Who Gets Left Behind?
Likely to Benefit:
- Forestry communities: Greater demand, stabilized employment
- Skilled trades: If modular scaling is paired with local factory work
- Developers: Lower input costs and greater project stability
- Municipal governments: Faster housing delivery = more tax base
At Risk:
- Urban renters: Without parallel social housing programs, they won’t benefit
- Unskilled workers: Especially those displaced by automation or industry changes
- Lumber mill workers: In regions where local housing demand doesn’t materialize
Equity must be built into this plan—or inequality will deepen, even if housing supply increases.
Modular & Mass Timber: Canada’s Housing Backbone?
Modular construction is not just a buzzword. It’s essential.
Building entire homes or components in factories and assembling them on-site allows for:
- Faster delivery (weeks, not months)
- Lower labour dependency
- Quality control
- Less waste
Canada must invest in:
- New modular factories (especially in high-need zones like Ontario, BC, and Alberta)
- CLT (Cross-Laminated Timber) production capacity
- Cold-weather prefab technologies
- Public procurement mandates requiring modular components
This is how we turn 500,000 homes a year into a tangible reality.
Upskilling Not Just Forestry Workers—but Everyone
The \$1.25B fund must do more than backfill lost U.S. sales. It should supercharge national retraining for:
- Forestry workers shifting to factory-based mass timber production
- Unemployed or underemployed workers in retail, logistics, or fossil fuels
- Young adults not in school or work
- Women, immigrants, and racialized workers underrepresented in trades
Canada needs a national modular construction training program, perhaps built into high schools, community colleges, and online platforms. Some already exist, and funding needs to be accessible.
This effort should not just be about salvaging one industry—it should be about preparing the next generation for the build-out of our future.
Emerging Industries for Lumber & Wood Innovation
Let’s stop thinking of “lumber” as raw planks. Canada can lead globally in:
- Mass timber architecture
- Modular exports to countries with housing shortages
- Sustainable, affordable furniture
- Public infrastructure (schools, clinics, emergency housing) built with wood
- 3D-printed wood composites for structural and aesthetic applications
By branding our lumber as green, innovative, and purpose-driven, we can open doors in both global and local markets.
What Canadians Can Get Behind
Carney’s plan is just a starting point. But it represents a turning tide.
Now Canadians must:
- Demand local modular factory development
- Push provinces to update outdated zoning
- Ask their MPs to back public housing corporations
- Support inclusive upskilling programs in trades, tech, and timber
- Insist on Indigenous-led forestry and modular development partnerships
This is not just about homes. It’s about nation-building—using Canadian resources for Canadian priorities.
What Could Go Wrong?
Let’s be real.
If we over-rely on tariff changes or miscalculate how fast factories and workers can scale, we could see:
- Lumber gluts leading to mill closures
- Rising home prices if domestic supply is outbid by the U.S.
- Backlash from developers if pricing and permitting remain uncertain
- Missed climate targets if prefab tech isn’t green
Policy must be backed by real infrastructure, workforce planning, and procurement reform.
Final Thoughts: This Is the Spark—Not the Solution
Mark Carney is right to bet on lumber. Redirecting our own natural resources to serve domestic needs is a foundational step in building a self-sufficient housing ecosystem. But this policy announcement, while bold, is just the first domino in a much longer chain of actions Canada needs to take.
If we’re truly serious about building 500,000 homes per year and creating a real estate environment that supports affordability, growth, and equity, this policy must be backed up by aggressive and coordinated national strategies across multiple fronts:
A National Modular and Prefab Housing Strategy
We can’t build 500,000 homes a year with sticks and nails alone. Canada needs a federally coordinated modular construction strategy, with funding, zoning reform, and procurement standards that promote:
- Mass production of modular housing units in regional factory hubs
- Standardized building code harmonization across provinces for prefab elements
- Streamlined permitting pathways for off-site construction to speed up delivery
This requires turning modular into mainstream—much like Singapore or parts of Scandinavia have already done. We must leverage Cross-Laminated Timber (CLT), 3D concrete printing, and hybrid systems that reduce costs, waste, and build times while delivering high-quality, sustainable housing.
Public Investment in Building Tech Innovation
Modular and prefab will fall flat if we don’t modernize the underlying tech stack. Governments should establish Innovation Zones and tax incentives for R\&D in areas like:
- Automation in construction and smart fabrication
- Digital twins and BIM (Building Information Modelling)
- AI-assisted site planning, code compliance, and materials procurement
- Green tech: solar-integrated panels, low-carbon cement, zero-emissions HVAC systems
We can’t scale 21st-century housing with 20th-century tools. A new era of “smart manufacturing for housing” should be treated with the same urgency as past infrastructure revolutions—like rail or telecom.
Workforce Transformation—Not Just Retooling, But Reinventing
It’s not just about retraining forestry and mill workers who may be displaced by export declines—it’s about transforming the entire construction workforce and preparing underutilized populations to participate:
- Expand trades training for modular installation, logistics, and tech-based roles
- Offer accelerated, subsidized programs for women, newcomers, and racialized workers
- Incentivize upskilling in rural and northern regions, where housing needs and labour shortfalls intersect
The construction sector is facing a labour crisis. We must make it easier and faster for people to transition into it—from both within and outside the country.
A Faster, Smarter Immigration and Settlement System
Canada’s population growth and housing supply planning are out of sync. To welcome and integrate newcomers who can help build this housing boom, we need to:
- Streamline immigration pathways for skilled tradespeople, construction tech workers, and entrepreneurs
- Pre-assess and match talent to regional housing factory or site needs before arrival
- Invest in rapid settlement support, including job placement, credential recognition, and temporary housing access
It’s not enough to open the door—we need to build the runway. Done well, immigration can be a growth engine for both housing supply and demand. Done poorly, it leads to labour mismatches and worsening housing strain.
A Resilient, Diversified Trade and Industrial Strategy
The current move to redirect lumber for domestic use is a good hedge—but Canada remains vulnerable to tariff flip-flops, especially from the U.S.
To protect our real estate and construction ecosystem, we need:
- Diversified export markets for finished wood products beyond the U.S.
- Strategic reserves and hedging instruments to buffer against supply shocks
- Cross-border trade agreements tied to green building goals and shared housing initiatives (e.g., Canada-EU sustainable wood partnerships)
We must not overcorrect into dependency on domestic-only demand. A balanced strategy will allow us to build at home and export value-added goods abroad—from engineered wood to modular kits.
The Real Challenge: Systems, Not Slogans
This moment is about more than wood—it’s about will.
Canada has the raw materials, the people, and the need. But unless we build out the systems that connect supply to demand, innovation to labour, and immigration to execution—we’ll fall short.
Mark Carney’s announcement is not the final answer. It’s a spark—a chance to ignite a housing-industrial movement that finally puts housing at the heart of national economic strategy.
Now it’s up to provinces, cities, industry leaders, and citizens to carry the torch.
Stay tuned as we analyze whether this ambitious plan can truly build faster, smarter, and more affordably for all Canadians.