Thank you, Mr. Chair.
The Canadian Home Builders' Association appreciates the opportunity to present to the standing committee with information and perspectives on the evolving and critical role of wood and wood products in our industry and in the homes of Canadians. My comments this afternoon will focus on the overall dimensions of our industry and the role that wood products play in the homes that our members both make and renovate across the country.
I also want to highlight a number of important and innovative trends that may support the increased future use of value-added wood components, including both engineered wood and secondary wood products.
Home building and renovation are obviously an important source of demand for Canada's forest sector and a major end market for a wide range of Canadian-produced wood products. Based on Statistics Canada input-output data, our industry's consumption of forest products amounts to over $8 billion annually, providing a major domestic base for the forest products industry.
The residential home construction industy consists of two primary segments, new home construction and home renovation. In totality, it represents one of the largest industrial sectors of our economy. Last year, our industry generated some $138 billion in economic activity, $67 billion in new construction and $71 billion on the renovation side of things. In 2016, residential construction supported just over one million jobs across Canada, both directly and indirectly, and this employment generated just under $60 billion in wages.
In relation to new homes, we're seeing a significant shift in the product mix that our members are building. Simply put, the traditional Canadian home is changing as our cities become more densely developed and absorb an ever-growing number of Canadians per square kilometre.
In 1996, 60% of all the housing units in Canada were single detached homes. By 2016, single detached homes represented only 32% of all the new homes we built in a year, while about 50% of new homes were apartments of all types, whether condominiums or for rent. The remainder were made up of low-rise multi-family units like townhomes and row homes.
The way we build homes is also evolving and will continue to do so in the coming years. This will have a direct bearing on the products and the materials used in construction, including a wide range of wood-based products. The environmental performance of homes, particularly their energy efficiency, has evolved tremendously over the past few decades. This evolution will continue and in fact accelerate in the years ahead.
A new home built today uses a fraction of the heating energy required in an older home. Half of the homes in Canada today were built before 1985, and that older half of the housing stock uses twice as much energy as the homes built since 1985. As well, a new home built right today here in Ottawa would use 20% or 30% less energy than one built just five years ago.
This trend towards improved energy efficiency is far from over. Based on the policy direction set by government for future building codes, by 2030 all new homes will require an additional improvement of more than 50% in energy performance, reaching “Net Zero Ready” standards.
This is an ambitious goal and one that will challenge our industry. It will also challenge society unless affordable means for reaching these levels of energy efficiency can be found, and as an association we continue to be concerned about affordability for younger Canadians looking to become homeowners.
Changes in how we build homes will impact the role that wood products and other materials play in the construction process. Today a typical 2,400-square-foot single detached home requires about 16,000 board feet of dimensional framing lumber. Its construction also consumes about 14,000 square feet of other wood products, including plywood, oriented strand board, glulam beams, and laminated veneer lumber.
Each new home also requires a range of secondary wood products, including flooring, cabinetry, siding, decking, and millwork. As well, wood components are incorporated into windows and doors.
To put this in value terms, dimensional framing lumber represents only about 14% of the value of all wood products used by our industry. Secondary wood products, including millwork, windows, doors, and prefabricated wood assemblies, represent about 60% of the total value of wood we consume each year. As we look to the future, secondary wood component use is less likely to be impacted by changing codes; however, the structural elements certainly will be affected.
There is a long-standing trend in residential construction towards ever-greater use of value-added engineered structural components. In the future, this may tend to blur the lines between engineered and secondary wood products. We're seeing this happen in some markets, where traditional site-building home builders are switching over to the use of factory-built wall systems, traditionally viewed as a secondary product. It's also reflected in the structure of our association. The two national organizations representing factory-built home builders merged with CHBA last year, creating our new factory-built Modular Construction Council. This simply reflected the increasing integration of building practices across all segments of our industry.
In addition to this trend of increased industrialization, we're seeing engineered wood products leading the way towards new forms of wood construction. Six-storey wood frame buildings are now referenced in the National Building Code and are being constructed in a number of provinces. We're also watching, with great interest, research and demonstration of wood structures of between six and 12 storeys based on innovative technology like cross-laminated timber.
Our industry's interest in such emerging and innovative technologies is very straightforward: we need to provide Canadians with great homes that meet ever-higher performance requirements and consumer expectations. At the same time, housing affordability is a central preoccupation, as it directly impacts the capacity of younger Canadians, new Canadians, and those with young families to become homeowners.
As an association, we feel it's incumbent on all of us, including government, to ensure that more demanding codes don't impact affordability, which means we need to find technologies and techniques to do this at the same cost or less. This is a real challenge.
From our industry's perspective, a key aspect of any new building technology, whether wood-based or not, is its capacity to help us address the affordability challenge. Diminished affordability serves as a growing barrier to home ownership, and we're seeing the effects of this problem. The latest census data, released quite recently, showed that for the first time in our history, Canada's overall home ownership rate has declined, from a peak of 69% in 2011 down to 67.8% in 2016.
Perhaps more significantly, the ownership rate has declined for all age groups under 65, but especially for younger Canadians. As we move forward, knowing that future building codes are going to demand performance that currently means much higher house prices, we're looking at new, innovative technologies and materials to help us preserve and enhance affordability. Innovative wood products can and should be part of this mix. Most importantly, as Canadians, we know how to make this happen.
Over the last 70 years, there has been tremendous collaboration between our industry, the forest products industry, and the federal government to advance the science of home building. This has led to a wide range of innovations, from roof trusses in the 1950s to the 12-storey cross-laminated timber buildings being pioneered today. It has allowed us to build net-zero energy homes and to begin to find ways to reduce the cost premium involved. While we still have a distance to go in getting these costs down far enough, we are on the right path.
We therefore need to see more of this research and development activity, and we need to ensure that it's focused in areas that can enhance both the quality of housing and its affordability. Our association works with Natural Resources Canada, the National Research Council, and Canada Mortgage and Housing Corporation on a wide range of housing-related research. Such collaboration is what gave Canada housing technology like R-2000, which put us at the leading edge internationally, and our voluntary CHBA net-zero home labelling program, which is reasserting our international leadership today.
The homes our industry will build in 2030 must deliver the high levels of comfort, quality, and value that Canadians demand at a price they can afford. They must also contribute to more sustainable and resilient communities that provide housing options for all Canadians. These future homes must also make more efficient use of our natural resources. This is a tall order and a real challenge, but the potential rewards are significant: a stronger residential construction industry; stronger resource industries, including the forest products sector; great homes for Canadians; financial well-being for a new generation of homeowners; and enhanced opportunities to share our innovations and products with the world.
These are outcomes worth working hard to get. Our industry looks forward to partnering with the forest products sector and government to make it happen.