Canada’s Modular Industry Is One Factory Floor and Thirteen Approvals

Canada does not have a modular construction problem. It has thirteen approvals that one factory has to satisfy, and a certification scope that has to be written to the narrowest of them.

That is the structural fact underneath every forecast about offsite housing in this country, and it is routinely mistaken for a capacity problem. The factories exist. The demand is not in question. What sits between them is a code that only binds where it has been adopted, and a certification that is granted as a scope rather than as a licence.

The code is a model, not a law

The Canadian Home Builders’ Association sets out the mechanism without decoration: national codes “are model codes and their provisions only become requirements when they are adopted by the local authority having jurisdiction.” Every building, factory-built or not, must comply with the locally applicable code — which means a module leaving a factory in one province is being built to the requirements of wherever it will land, not of where it is standing.

Factory construction therefore carries a step that site-built does not: an “off-site review” to show the authority that the elements constructed in the factory comply. In practice, CHBA explains, this is done by certifying the entire factory construction process to CSA A277 — “just like building products installed in buildings are certified.”

Certification is a scope, not a certificate

This is where the market structure lives and where it is most often missed. CSA A277 certification must be performed by a certification body accredited by the Standards Council of Canada and recognised by the authority having jurisdiction. It certifies two things: the factory’s quality system and quality programme, and the buildings, modules or panels produced there as complying with applicable local regulations. The body oversees the in-plant quality process, signs off on personnel and record-keeping, and conducts annual audits and random inspections.

Critically, that certification has a boundary. CHBA’s own illustration: “a factory’s scope could include just Part 9 single-family houses, or all Part 9 buildings, or Part 9 buildings and Part 3 assembly occupancy.” The certification body carries its own scope too, limited by its qualification to evaluate buildings of varying complexity.

A modular factory, in other words, is not licensed to build. It is licensed to build a stated class of building, for a stated set of jurisdictions, under an annual audit. Widening that scope is a project with its own timeline, its own professional involvement and its own evidence file — and it sits in front of the sales pipeline rather than alongside it.

Thirteen jurisdictions, three of them requiring certification

Acceptance is not uniform. CHBA’s table distinguishes jurisdictions where CSA A277 certification is required — Alberta, Quebec and Yukon — from those where it is recognised or accepted, either through provincial or territorial regulation or through municipal policy. With ten provinces and three territories, that is thirteen adoption paths for one product.

The consequence is straightforward and it is the thing that limits growth: a factory optimises for the overlap. The scope it holds, and the audit history behind it, define the set of projects it can bid without a new approval. That set — not the size of its line, not the length of its order book — is its addressable market.

The industry’s own diagnosis agrees

The Modular Building Institute’s Canadian report, produced with FMI Consulting, describes a construction market that is “stable but constrained” alongside a modular sector “positioned for long-term growth despite near-term headwinds.” It devotes dedicated sections to national standardisation and to tariff impacts. Standardisation is not an appendix in that document; it is one of the two structural variables the industry puts in front of its own members.

The capacity side is smaller than the rhetoric implies. MBI represents more than 700 member companies in 34 countries, including 72 in Canada. On the report’s own cover: a five-storey, 40-module, 28,500-square-foot multifamily project in Prince Rupert, British Columbia. That is 712.5 square feet of building per module (calculation) — a module is a room and a half, and a mid-rise is forty of them coordinated onto trucks.

What the constraint actually is

The binding constraint is not the factory floor, and it is not demand — Canada’s housing shortfall is not a secret to anyone who would buy a module. It is that a module is a building only once somebody with jurisdiction agrees that it is, and the set of people who can agree has been fragmented by design.

The commercial implication follows directly. The durable advantage in Canadian modular is a certification scope wide enough to bid across most of the country, plus an audit history that shortens each new authority’s review. That is a regulatory asset, it compounds, and it is far harder to buy than a second production line. A single national adoption of the code would, for the factories that already hold the wide scope, be a market-structure event in their favour — and for everyone else, a re-qualification bill.