With the Carney government looking to double the pace of new housing starts to nearly 500,000 units per year, a Toronto-based cleantech start-up is pitching a line of affordable, modular designs that meet and exceed a net-zero standard.

The approach “marries best-in-class construction techniques with advancements in renewable energy and assembly to deliver net-zero, prefabricated homes,” CABN says on its website, which lists designs ranging from 540 to 2,500 square feet and from one to four bedrooms. Standard features include:

• Forest Stewardship Council (FSC)-certified wood;

• Helical pile foundations that typically use no concrete and can be installed in a couple of days;

• Net-zero, passive solar designs;

• Solar and battery storage systems integrated with high-performance building components;

• Smart home monitoring systems.

“Modular and prefab allows an opportunity for speed and end-to-end cost savings for building affordability, net-zero, and sustainability,” said company CEO Jackson Wyatt. “We bring the energy infrastructure so that we’re not a burden on the grid, we’re a support structure. And for municipal affordable housing, it reduces the cost of land, which means lower rents and housing costs and less burden on the municipality.”

Federal and provincial energy efficiency programs typically focus more on building retrofits than new construction, Wyatt added. “Often, government projects take the lower-hanging fruit, which is retrofits,” he told The Energy Mix.

But with a new direction at the federal level, he said incentives should favour “a more efficient, longer-lasting home, and a more sustainable home,” with financing and grants that match the funds available for add-ons like rooftop solar for existing buildings.

Customers are asking: “Why do I have to build my home, then wait months before I’m eligible to add solar?” he said. “I’m doing the right thing, and I’d love to be able to get the same benefits as my neighbour.”

Carney Touts Prefab

CABN formed four years ago after Wyatt exited his previous company, Greenlid, which manufactured compostable dishware, cups, cat litter trays, mosquito traps, and compost bins between 2014 and 2021.

That was some time before the federal election campaign this past spring, when Mark Carney’s Liberals promised a $25-billion investment—including $10 billion for affordable developers—for “innovative prefabricated home builders in Canada, including those using Canadian technologies and resources like mass timber and softwood lumber, to build faster, smarter, more affordably, and more sustainably.”

In his May 21 mandate letter to his new cabinet, the PM committed to “restore the affordability of housing” by “unleashing the power of public-private cooperation, catalysing a modern housing industry, and creating new careers in the skilled trades.”

A month later, Toronto Star business columnist David Olive declared prefab the cheapest way to build lots of homes quickly.

“Canada has several world-class makers of prefab homes,” Olive wrote. “For now, those builders are limited in number relative to potential demand for their products, and many are operating below capacity.” But Carney’s “unprecedented backing” for prefab, also known as manufactured or factory-built housing, “holds promise of creating a new export industry.”

Olive is one of several writers and analysts who at least partly trace Canada’s affordable housing crisis back to what he calls the federal government’s “decades-long absence” from the housing market. Over that period, new housing construction fell below 300,000 units per year, far less than a 1970s peak of more than 400,000, and “the private sector built oversized houses and luxury condos rather than affordable housing.”

While he sees some reason for skepticism about the new federal agency Carney is proposing, Build Canada Homes (BCH), Olive says the model for financing construction and placing bulk orders for new homes is working well in Sweden and Japan, is under consideration in the UK and Germany—and in Canada, delivered “an enormous amount of housing in response to a previous immigration surge” in the 1960s and 70s.

“BCH will provide the essential financing in a highly fragmented residential construction industry of mostly small businesses that lacks access to capital,” where “the scarcity of capital dissuades house builders from taking on new projects,” Olive writes. “With its bulk purchases, BCH also guarantees a high minimum level of demand. Housing financed by Ottawa will find owners and managers, many in the non-profit and co-op sectors including seniors, student, and Indigenous housing.”

And “taxpayers aren’t on the hook since the government financing is in the form of loans, collateral for which is new housing that appreciates in value,” he adds. “That’s how we solved previous housing crises, the twist this time being Carney’s emphasis on factory-built housing,” where “floors, walls, ceilings, and entire kitchens and bathrooms are built in a factory and assembled on site.”

Same As It Ever Was

Jayson Myers, CEO of NGen, an industry-led non-profit focused on homebuilding technology, makes a similar case in an opinion piece for The Hill Times, arguing that Canada is now building “fewer homes, at greater cost” when the housing crisis demands a larger supply of affordable units.

“The noise and waste coming from construction sites aren’t just irritants. They’re symptoms of a structural failure in how we build homes,” Myers writes. “Despite the urgency of Canada’s housing crisis, the vast majority of new homes are still constructed the same way they were 10, 25, even 50 years ago: with the same tools, the same choreography between multiple contractors, and the same delays.”

He cites advanced manufacturing as a cornerstone of the effort to speed up construction timelines, cut costs, boost quality, and reduce the industry’s environmental impact.

“We already have automated factories producing wall, floor, and roof modules for rapid onsite assembly,” Myers says. “3D printers can fabricate panels to millimetre precision, accounting for complex layouts and reducing human error. Mass timber—a Canadian strength—offers a low-carbon alternative to concrete and steel for many low- and mid-rise buildings.”

While “these aren’t futuristic dreams,” he adds, “federal and provincial government housing policies can’t focus solely on building faster. They need to ensure we build smarter,” with advanced manufacturing incentives that make housing more affordable, overcome a daunting shortage of skilled trades, and meet Canadians’ expectations for quality housing.

The Star’s Olive says a kick-start from government propelled a prefab industry that now supplies more than 15% of the new housing in Sweden and Japan. But repeating that feat in Canada will mean navigating a “crazy quilt of varied provincial and municipal zoning bylaws and building codes” across the country.

“Cities like Calgary, Edmonton, and Vancouver have shown the way in cutting red tape,” he writes. “But many local obstacles remain, including steep developer fees that cities need to finance infrastructure to support new housing.” That much more so when city policies relentlessly favour costly urban sprawl over  “missing middle” or “gentle density” development.

Net-Zero Construction Meets Modular

CABN’s Jackson Wyatt said his company takes a “full-system approach” to sustainable manufacturing, from net-zero facilities to a value chain where some components are compostable or carbon-negative.

“We say ‘trees to keys’,” he told The Mix. “We don’t just focus on being a robotics company or just a panel company. We like to build communities and look at where our sustainable materials and resources come from.”

He said that includes turning to underutilized tree species, from hemlock in Eastern Canada to poplar in the west, that grow too small for traditional wood frame construction but work well for manufactured housing, and at lower cost. Regular builders “don’t like them because they’re knotty and have a high sap content,” Wyatt explained. “But they’re perfect for us,” enabling CABN reduce the cost of its product while supporting sustainable local forest management.

After that, standardizing construction with robotics and computer numerical control (CNC) “removes the human variable in assembly that often makes buildings less efficient, or may mean that only a select few people can put it together efficiency,” he continued. “So it’s that control from beginning to end, removing as much human error as possible from the process.”

The result, he said, is a net-positive design that exceeds 100% efficiency based on the energy a home consumes versus the energy it generates—in theory. The company’s modelling for different geographies indicates average efficiency of 138%, and “human behaviour will drag it down to 105.”

“There’s a 15 or 20% human variable that is uncontrollable,” Wyatt said. “But by building better and building to such a high standard, you diminish that impact as much as possible.”

An independent energy simulation for an early, 600-square-foot model, published in 2021 and supplied by CABN, calculated the structure’s combined heating and cooling demand at about nine kilowatt-hours per square foot per year for a location in Toronto, compared to 250 kWh for the average Canadian home. The design “does not meet the usual specification of many tiny homes but rather represents an extraordinarily energy- and functionally efficient single-family home,” wrote engineering technologist Ross Breton and engineer Stephen Harrison.

“The unique feature of the proposed structure is the enhancing of passive solar gain during the heating season, while avoiding overheating that would increase cooling loads during the summer and shoulder seasons,” they added. “By reducing heat transmission and air leakage through the building envelope, combined with efficient energy recovery in the active ventilation system and ‘smart’ use of outdoor air and shading for cooling, energy use is minimized while maintaining air quality and occupant comfort.”

A System Approach

But Wyatt stressed that the actual manufacturing is only one part of the system.

“It’s not just making buildings 365 days a year,” he said. “It’s banking. It’s government policy. It’s the boots on the ground with local builders that all have to be a part of the process.”

And that will mean breaking through on a challenge that has slowed down the adoption of energy-efficient construction techniques for years and decades.

“There’s 50,000 builders in Canada doing a few homes a year [each],” he said. “They all want to double their home count. They have the demand. But they need to be trained in building out these more sustainable, airtight, energy-efficient homes, just like the large, thousand-home-a-year developer will need to, as well.”

Even as he advocated for a “radically technologized” housing sector, Wyatt stressed that “technology shouldn’t displace people.” He said standardized, modular designs might reduce the time required for a set of plumbing hook-ups, for example, from 10 hours to 2½ or three—so a builder should be able to translate those efficiencies into lower costs, while still paying the plumber for the equivalent of five hours’ work.

“The technology should be a tool for everyone to work more successfully and profitably,” he declared.

Ready to Scale ‘In Months and Years, Not Decades’

Earlier posts on CABN’s website list smaller units, like a 540-square-foot, one-bedroom cottage that sells for $139,000 and could be “a perfect fit for hospitality use, laneway suites, or cottage bunkies.” Its “boldest lineup yet” includes a 2,500-square-foot, four-bedroom design meant for “multigenerational families, retreat-style living, or a home base,” with prices starting at $499,000.

So far, the company has about 35 projects under way in British Columbia, Ontario, Nova Scotia, and the U.S. states of Connecticut, Maine, New York, Pennsylvania, and Virginia, a spokesperson said. But Wyatt said CABN will soon have “actionable plans” to build tens of thousands of efficient, modular homes per year—beginning “within months and years, not decades.”

One project, a 67-unit, net-zero development in Eastern Ontario’s Augusta Township, netted CABN and its partner B+H Biomimicry a juried award in late June from AZURE Media, a leading publication on contemporary architecture and design.

Make It Affordable

But while Carney has said it will take “both the private and public sector” to deliver 500,000 new units per year, the government hasn’t yet indicated how it will define and work with “affordable home builders”, or whether the $10 billion on offer will go to private builders, non-profits and co-ops, or some combination of both, Toronto-based journalist Emma Buchanan writes for The Logic. The answer to that question may depend on federal capacity and funding that peaked decades ago before it was drastically cut back.

Last time around, the Crown-owned Canada Mortgage and Housing Corporation held centre stage. “By the 1980s, its presence was vast, with about 90 offices across the country. These offices supported a network of building inspectors, architects, appraisers, market analysts, and loan officers,” Buchanan writes, citing Steve Pomeroy, executive advisor and industry professor at McMaster University’s Canadian Housing Evidence Collaborative. “Working relationships with social housing organizations also resulted in the construction of roughly 25,000 affordable homes per year from the late 1960s to the early 1980s.”

But in the mid-1980s, Ottawa “began shifting responsibility for housing to the provinces,” she recounts. “In 1993, Canada’s federal budget removed all new funding for non-market homes,” leaving B.C. and Quebec as the only provinces funding co-ops or non-profit housing. Federally-funded units fell from 43,000 in 1970 to less than 5,000 per year between 1995 and 2016—a loss of nearly 1.2 million homes over a 32-year span.

Now, the government says Building Canada Homes “will act as both an affordable housing developer and financer, absorbing all relevant programs from the CMHC and building at least in part on public land,” Buchanan says. But most of the country’s affordable housing expertise now rests with cities and provinces, the private sector builds 95% of new housing, and “Pomeroy’s research suggests that Canada spends huge sums subsidizing affordable home builds, only to lose 11 low-rent units for every new one added. The cause, he said, is that rent hikes and demolitions remove affordable homes faster than they can be replaced.”

Those numbers show that “the model of investor-financed housing isn’t working, and I think we’re in a huge moment to change that,” Ottawa Climate Action Fund Executive Director Cherise Burda told Buchanan. While there’s a role for private developers, officials are asking them to deliver affordable housing when that’s not their job.

“Let’s get shovels in the ground that aren’t dependent on that model,” Burda said. 

[Disclosure: The Energy Mix Publisher Mitchell Beer is a strategic advisor to the Ottawa Climate Action Fund.]