By their nature, manufacturers are accustomed to navigating changes in trade and economic turbulence. Even so, the ongoing rollout of the Build Canada Homes agency and the $51-billion Build Communities Strong Fund—now combined with the launch of the $25-billion Canada Strong Fund in the spring economic update—have ramped up national expectations for a massive wave of new housing and infrastructure.
For businesses that actually mine, manufacture, and ship the building materials required to build those projects, the path forward still runs through persistent obstacles in capacity, logistics, and workforce that highlight the risks and pressures facing Canada’s supply chain.
Canada’s ability to deliver on its housing and infrastructure targets depends on a supply chain that can keep up with demand. Manufacturing capacity, labour availability, distribution challenges, and trade policy—including tariffs and the federal Buy Canadian Policy—directly affect whether projects move forward or stall. With the 2026 building season now in full swing, the conversation must remain centred on the building materials supply chain as the engine of completion.
Canada’s supply-side deficit
Residential development relies on a complex network that transforms raw materials into finished products, which are then transported and installed in homes. Since the pandemic, Canadian manufacturers have been operating at near full capacity to meet demand. The average Canadian home requires about 8,000 sq. ft. of wallboard. With Canada’s target of up to 480,000 homes per year by 2035, and current industry capacity supporting about 280,000 homes, there is a significant gap. Including commercial and institutional demand, available wallboard can complete only about 220,000 homes annually—well below Ottawa’s goals. Even as policy shifts toward modular and prefabricated housing to speed up delivery, the material reality remains the same. These homes still require drywall, and moving the assembly process off-site into a factory does not solve the underlying need for a resilient and expanded material supply.
To close this gap, 2026 must be a year of industrial expansion.
Regulatory barriers and trade pressures
Policy ambitions are often blunted by the reality of provincial and municipal red tape. Even when manufacturers are ready to scale, the financial and regulatory environment at the local level can stall progress. While the government’s new $1.7 billion commitment in the spring economic update to the Improving Housing Supply Act aims to reduce development charges and barriers, without a coordinated effort between all levels of government to harmonize incentives and remove administrative hurdles on the ground, projects will remain stuck in the planning phase. When cities struggle to find a balance on development charges or infrastructure funding, it creates a wait-and-see environment for builders, meaning the materials needed to build them will sit in warehouses rather than on job sites.
Tariffs on imported drywall, introduced in 2016, have spurred some domestic investment, but scaling up manufacturing takes time. For the foreseeable future, Canada will continue to depend on some imported wallboard to meet national demand. This makes the impact of today’s tariffs on building materials like steel and aluminum especially significant, as these costs continue to drive up the price of new homes. Strengthening domestic manufacturing capacity, while maintaining access to essential imports, is critical to supporting housing and infrastructure needs, as Buy Canadian procurement policies are now being implemented across federal and provincial infrastructure projects.
Workforce of the future
We need more skilled workers and tradespeople throughout the supply chain. This requires addressing two distinct challenges: supporting the manufacturing workforce that operates the plants and mines, and increasing the number of skilled tradespeople on the front lines. Currently, the industry is fighting a structural imbalance. Our workforce is aging, yet not enough young people are entering these critical sectors—even as youth unemployment and underemployment reach 10-year highs. This gap between available talent and the technical skills we need directly leads to higher costs and more project delays.
Innovative companies are finding better ways to attract talent and support the workforce. For example, engineering building materials to be significantly lighter provides a direct ergonomic benefit for installers. These lighter products allow tradespeople to work faster with less physical strain and a lower risk of injury, helping them stay in the industry longer. However, more must be done to reduce outdated stigmas and remove inter-provincial barriers to recognizing skilled trade credentials.
The spring economic update’s introduction of Team Canada Strong, a $2 billion commitment to recruit and train up to 100,000 new Red Seal skilled trades workers, is exactly the kind of systemic action the industry needs. We must now ensure these pathways don’t just supply jobsites, but also fill the critical technical roles required to build a future-ready manufacturing workforce.
Building capacity closer to demand
Canada’s widely dispersed population centres mean that moving building materials efficiently is a challenge, typically relying on truck or rail. The best solution is to shorten supply chains by developing new facilities closer to where homes are built. These investments have a direct impact on construction times, affordability, and carbon footprints.
Across the industry, companies are investing to strengthen domestic supply. For example, CGC Inc. has committed nearly $310 million to revitalize its Little Narrows gypsum quarry in Cape Breton, Nova Scotia, and to build a new wallboard manufacturing facility in Wheatland, Alberta. Both projects are scheduled to begin operations in the second half of 2026, which will expand local production capacity, create jobs, and support regional builders. Other companies are also expanding mass timber, cement, and insulation manufacturing to help meet Canada’s housing needs.
These investments will expand Canada’s ability to produce the materials its housing and infrastructure goals depend on, but more will be required to meet the ambitious targets ahead. Manufacturers need the right incentives to expand capacity and efficiency at home. Cutting red tape and improving supply chains between provinces are key to getting homes built and expanding the country’s productive capacity. With the $51-billion Build Communities Strong Fund now accelerating projects like transit, water systems, and bridges, the demand on our domestic supply chain will only increase. These private capacity investments are more vital than ever to ensuring the materials required to build our communities are actually available here in Canada.
Turning commitments into construction
The federal government has shown it is willing to fund the homes and infrastructure Canadians need. But funding is only half the equation—we still need the physical materials to build them. Right now, industry leaders are looking at the math and asking if our supply chain can handle the demand. If we want these projects to succeed, government policy has to support the manufacturers investing here at home. That means removing tariffs that drive up construction costs and creating the right incentives to expand Canadian manufacturing capacity. We can’t build the Canada of tomorrow if we don’t secure the materials we need today.
Steve Youngblut is President of CGC Inc., Canada’s leading building materials manufacturer, which has operated in the country since 1907. He has spent…
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Can Canada’s building materials supply chain meet the demands of ambitious housing and infrastructure projects funded by recent government initiatives? While the government has allocated significant funding, challenges persist in manufacturing capacity, logistics, and workforce availability. A supply-side deficit, regulatory barriers, trade pressures, and workforce shortages are key obstacles. Addressing these issues through industrial expansion, streamlined regulations, strategic trade policies, and workforce development is crucial. Investments in domestic manufacturing and efficient supply chains are essential to ensure the availability of materials needed to achieve Canada’s construction goals and build the Canada of tomorrow.