Thank you, Chair and committee members, for the opportunity to address this urgent issue: the future of Canada's forest industry and the critical role wood-based manufactured housing can have.
My name is Geoff Cape. I'm the CEO of Assembly Corp., a Canadian company that's been around for seven years and that designs and fabricates wood buildings. The products we build are closely linked to sawmills and secondary wood manufacturers, allowing us to translate Canadian lumber into high-performance housing systems.
Recently, Assembly participated in a tour of Swedish factories with the Canadian Wood Council. Through that experience, we learned a series of lessons related to how several new federal strategies in Canada—budget 2025, Build Canada Homes and the buy Canadian policy, together with the federal softwood lumber transformation and tariff response packages—can participate in solving some of our challenges.
First, on the development of new value-added wood products and market diversification, the Swedish experience shows that success comes not only from advanced technologies but also from a confidence in factory-based housing built through policy and customer experience. Factory-built houses are regarded as a higher-quality product in Sweden, as they are in many northern European countries. Canada is creating similar strategies and has committed $2.2 billion to help transform the softwood lumber industry in this regard.
Second is the importance of wood for housing and carbon neutrality. The recently launched Build Canada Homes program is mandated to scale modern methods of construction, including factory-built wood systems for housing. It's expected to generate hundreds of millions of dollars in new annual demand for Canadian wood products as it deploys its initial $13-billion investment. The softwood transformation agenda should be fully integrated with this plan.
Third, regarding public procurement, Canada must move from short-term programs to a platform for industrialized construction and economic development. The Build Canada Homes program will prioritize multi-year, shovel-ready housing projects that use Canadian wood and the buy Canadian policy framework to require federal contracts to prioritize Canadian materials, including lumber.
To make this real, I believe the procurement needs to commit to multi-year pipelines of manufactured housing projects to help incentivize the capitalization of factory programs. It needs to create a strategic industrialization fund with federal loan guarantees to de-risk private investment. I'm aware that BDC is considering this, but within the ISED family there are other channels at Industry Canada to support this industry strategy. It also has to reform RFPs and payment terms, the contract structures for these suppliers, so that they can get paid a meaningful share during the manufacturing process and not just on the delivery of housing. There is a series of policy initiatives that need to be made to help facilitate this industry's growth.
On the forest management issue and the notion of vertical integration, Canada has begun to pivot from raw log exports to a forest-to-factory-to-housing model. The federal softwood package includes loan guarantees and funding to incentivize and increase domestic processing, including support for indigenous forestry businesses and an opportunity to diversify products and markets, all of which should be linked to housing demand.
Respecting the provincial and territorial jurisdictions, I think the next big step is to harmonize codes and help fast-track approvals for certified factories using tools like CSA A277. By pairing digital permitting and pre-approved designs, Canada can reduce interprovincial barriers and allow factory-approved wood housing to move more rapidly across jurisdictions.
Finally, on the need for training in the workforce, the sector needs targeted investments in training for off-site construction, industrialized design and logistics. Federal workforce and transition programs, along with budget 2025's skills investment, can be directed towards regional manufacturing hubs and high-profile projects to build skilled employment.
I'll end with this view. The effects on the Canadian lumber industry could be enormous. Federal policies such as those under the Build Canada Homes initiative emphasize certified Canadian wood systems. If this becomes the norm, I'll begin with the negative and end with the positive.
The lumber industry could—and this is the negative—see a decrease of 20% to 30% in per unit use of wood due to the efficient use of wood-engineered products and the optimization of material, but over the next five to 10 years the mass timber market should grow by well in excess of a billion dollars and, in the process, help cut embodied carbon by 40% and—