Evidence of meeting #129 for Human Resources, Skills and Social Development and the Status of Persons with Disabilities in the 44th Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was industry.
A recording is available from Parliament.
Liberal
Michael Coteau Liberal Don Valley East, ON
I think one of the recommendations that may come out of this is that we should look for ways, as a committee, to advise the government perhaps on a mechanism we can put in place to better connect companies like yours.
Thank you very much for being here.
Liberal
The Chair Liberal Bobby Morrissey
Thank you, Mr. Coteau. That's good. It keeps everybody on time.
Ms. Chabot, you have the floor for six minutes.
Louise Chabot Bloc Thérèse-De Blainville, QC
Thank you, Mr. Chair.
I'd like to thank the witnesses for being with us today. Sometimes we don't know a lot about certain subjects. That's why we invite them to come and answer our questions to clarify what we're studying.
I want to talk about modular construction and the use of solid wood, which we heard about from another witness.
My colleague said innovation is in the air right now, that we're seeing it emerge in various sectors, but that's nothing new. I'm thinking of the ads in Quebec with those well-known concrete blocks used for foundations.
In your opinion, what's your market share in the vast construction sector, both in the residential sector and in collective housing?
What are the roadblocks? You talked about municipalities. Other than that, what other roadblocks have you encountered when it comes to innovation or labour?
These questions are for Mr. Searles and Mr. Royer, but I'd like to hear what Mr. Royer has to say first.
Chief Executive Officer, Massive Canada Building Systems Incorporated
We're focused on affordable housing. We chose the six to 12‑storey apartment building market. We don't want to make luxury condos or custom-designed buildings. Our product is standardized to lower the cost of housing and speed up construction. Those are our two main objectives.
We will deliver a high-quality product that will be sustainable, particularly for rental housing. We will deliver it at a reasonable price to give young families who want to make buying a condo a priority the opportunity to buy one.
Our products are also very small in size. To start with, our apartment building will have 124 units. Those with a bedroom have 514 square feet of living space. So the units are compact, because larger, more luxurious housing is more expensive. We deliberately opted to focus on the biggest possible market so we could help as many struggling families as we could.
Bloc
Louise Chabot Bloc Thérèse-De Blainville, QC
Mr. Searles, do you have anything to add about market share and the challenges you face?
Bloc
Louise Chabot Bloc Thérèse-De Blainville, QC
Mr. Chair, I hope that the time lost won't be counted in my six minutes of speaking time.
Mr. Searles, I'm going to ask you another question. If I understood you correctly, you feel that things aren't moving fast enough when it comes to the materials you're using. You also want to make affordability a priority, but affordability is also about sustainability.
How are you helping to make that happen?
President, Lodestar Structures Incorporated
I think when we really look at where the housing crisis started, it wasn't that long ago when houses were actually affordable. It was in the last probably six to eight years that housing prices really started to climb. That is also when the supply of housing started to drop. When we look at the R and D, or the research and development, phase of the new technologies of products like Condo Core with Gaetan beside me and Lodestar and many others, there's a design phase that has to take place.
I know I've been doing this for about six years straight on the development of Lodestar. Then when you get it finally to where it's ready for market and you have that big long stretch of time where you have to go through the planning processes and permitting processes and all of that, you're now talking six, seven years, which is about where we're at right now. Affordability is going to happen naturally when we manufacture these buildings in a manufacturing-type setting.
Again, just like the implementation of building cars in a factory, with building homes in a factory you're going to start to see a lot of efficiencies and you're going to see a lot of challenges overcome by design and by professionals. I think the affordability aspect is going to be looked after as these things progress and as we get pumping these things out of the factories. If we continue to focus our efforts on just that, on doing it smarter and faster, I think that it should solve the issue.
I hope that answers your question.
Liberal
NDP
Bonita Zarrillo NDP Port Moody—Coquitlam, BC
Thank you, Mr. Chair.
It's a very exciting meeting today. I thank all the witnesses.
I'm going to use my time for witness Royer. I'm going to ask all of my questions up front and then if he could respond it would be wonderful.
Witness Royer, I've heard you speak many times. You are well recognized and well respected in the community in B.C. widely. I wanted your opinion on a couple of other items as well.
One was about the precarious work for tradespeople right now, how it's precarious work and how it's not work that's particularly appealing to young people. Why is it that they're not choosing it as a career path in your experience? Also, how can your product address accessibility? It was mentioned at the beginning of this meeting, and I know I've heard you speak before around accessibility, not just for your product and what you build but also for jobs within organizations like yours.
Then the environmental impacts are very interesting. How does something like prefabrication help us meet our climate goals? Then I would also ask if you have had the opportunity to meet with the housing minister federally. If not, I would certainly ask that the Liberal parliamentary secretary who sits on this committee make that happen.
Go ahead, witness Royer.
Chief Executive Officer, Massive Canada Building Systems Incorporated
Thank you very much.
As a young military engineer, I worked building trenches and worked in the rain. There's something really rewarding about physical work, and it's attractive to young people.
What's not attractive to young people is the fact that construction jobs are part of a gig industry. They are hired by a subcontractor for a specific project. These young folks, who have gone through institutes of technology to learn their trades, end up working for a month on a particular job, and then they're laid off for a few weeks while the subcontractor looks for another project. Subcontractors get asked to lower their bids for the next jobs they take, and they offer lower wages. In some cases, they ask those young folks in the construction industry to bid for the work they're going to be doing. They're going to end up working a 10-hour shift and invoicing for eight hours. It's a difficult, highly competitive industry. In our plant, we're going to offer permanent jobs with benefits, and we're going to offer a clean and stable work environment.
I think, as well, as we grow we want to get to the point where the standardization and industrialization of housing is such that we can build a plant for 20,000 units per year. Then that offers a career path for these young folks within a company or within the modular industry. We hope to be copied by others.
To address the other question about accessibility, in our 124 units, five units are fully accessible. We do have different types of condo cores, some with fully accessible bathrooms. All of our units are going to be adaptable, and we're working with the Rick Hansen Foundation on the design.
Within the plants, the construction sites typically are unwelcoming and treacherous. It's muddy. There are ladders to climb to get to the next floor. In our plant, we offer a welcoming environment. We're going to have jobs that are dealing with the preassembly of components, for example. Those jobs are going to be at a workbench, making it easy to accommodate a person with disabilities. There are no ladders and no heavy lifting. This is done by machines. We can certainly modify a workstation to accommodate a person so they can still work with their specific physical ability being looked after.
I know you didn't ask, but the other feature bringing equity is that we have a “first nations first” procurement policy.
Lastly, I'm going to say that our use of and our focus on mass timber as the structural element of what we do is going to help lower the carbon footprint. Inside a plant, we're going to utilize every bit of wood and every bit of material we can and reduce waste. Construction sites are typically really wasteful. There's a project, the BCIT housing project for students, that's been completed recently. One of the things that every contractor remarked upon was they had just one bin for the project, as opposed to having all kinds of garbage being picked up every day with packaging material. That's because they used a mass timber structure.
Similarly, I think my colleagues, with their product, they're not going to have any forms to take apart and throw away. It's a product that's going to be much more sustainable.
NDP
Bonita Zarrillo NDP Port Moody—Coquitlam, BC
Thank you.
Have you had the opportunity to get to the housing minister or has a presentation been able to happen?
Chief Executive Officer, Massive Canada Building Systems Incorporated
I haven't yet.
NDP
Bonita Zarrillo NDP Port Moody—Coquitlam, BC
Mr. Chair, I'll add to Mr. Coteau's comments that it would be great to be able to maybe hook up all of these witnesses with our housing minister. As I said, the PS sits on this committee, so I'm sure they can help make that happen.
Liberal
Conservative
Rosemarie Falk Conservative Battlefords—Lloydminster, SK
Thank you so much, Chair.
Mr. Searles, I want to follow up on a comment you made on an earlier question. You mentioned that housing prices have been up in the last six to eight years. From your perspective, what were or are the factors that have contributed to the drop in housing construction?
President, Lodestar Structures Incorporated
From our perspective, recently it would obviously be financial reasons: interest rates and banking issues. Then, I guess, it's return on investment for developers.
I talked with a developer the other day. For two five-storey buildings to house 144 people, similar to the one I spoke about earlier, he's looking at development costs and building permit fees of over a million dollars. That's the issue, as far as I'm concerned.
Conservative
Rosemarie Falk Conservative Battlefords—Lloydminster, SK
Thank you for that.
In a previous meeting, we heard from a witness that the biggest barrier to innovation for home builders was the risk related to taking on new technologies. I'm just wondering: Would you agree that home builders are risk averse towards new technologies for this reason?
President, Lodestar Structures Incorporated
The current climate adds to that risk. I think that home builders or developers are not really risk averse. I think it's the nature of the business that they're in, but I do think that when they go to CMHC or when they go to their financers that's where the risk aversion comes in. I think it's more at that level.
I think the institutions—the banks, the government institutions like CMHC—need to get their heads around what it is that they're willing to insure and what they're not and to not put everything in the same category. For example, our system is no different from a cast-in-place concrete system. It's strong, it's rugged and it's built in plants, but it's labelled, in the CMHC's eyes, the same as a construction trailer or something along those lines for modularity. It is not the same at all. It's a completely different system. I think we need more education on that front: more clarity with some of the bigger institutions.
Conservative
Rosemarie Falk Conservative Battlefords—Lloydminster, SK
When you refer to the recent climate, are you referring to high interest rates and the unpredictability that we're in right now?
President, Lodestar Structures Incorporated
I would say that it's the time to get something done. If you're investing as a developer, for example, you're doing architectural drawings and engineering and all of this stuff, and you're developing the land, so you're paying surveyors. You're paying all of the entities that it takes to get something ready for the planning stage and then through the planning stage. When that money is sitting out there for one year, two years or three years before you can even put a shovel in the ground, that is where a lot of the problem is.
That's where a lot of the risk is. People would rather do different things or take on quicker projects or even different projects altogether than invest that amount of money for that amount of time before they can even look at getting a return on their investment.