The federal government’s push to accelerate infrastructure development is raising questions about whether Canada’s construction industry has the capacity to keep pace.

Prime Minister Mark Carney announced the Build Communities Strong Fund in Budget 2025 to finance projects such as hospitals, recreation centres, universities, and bridges. It was formally launched this spring, as projects begin to move ahead.

Construction Canada recently spoke with Steve Youngblut, president of CGC, a large Canadian building materials manufacturer, to understand how government and industry can work together to deliver results.

According to Youngblut, the construction industry faces a major capacity gap. Annual housing targets often reach 480,000 homes, while completions are closer to 230,000. This is largely due to limited wallboard supply. For example, a typical Canadian home requires about 743 m² (8,000 sf) of wallboard, and once commercial and institutional demand is factored in, there is enough supply only to complete about 220,000 homes annually.

As the government pushes to build hospitals, schools, and universities, this gap could widen unless Canada boosts domestic material production.

The industry needs to expand domestic manufacturing capabilities, secure sustainable raw materials, and strengthen transportation and logistics networks, says Youngblut. Projects that add meaningful production potential—especially in Western Canada, where it is particularly lacking—take time, capital, and long-term planning. “We need to build underlying industrial capacity, not just set top-line targets,” he says.

The federal government has also introduced a “Buy Canadian” strategy to prioritize domestic materials and businesses. This strategy, Youngblut says, can improve supply reliability, reduce transportation complexity, and support local jobs and investment.

However, he cautions that the success of a “Buy Canadian” approach depends on available domestic supply. If demand exceeds capacity, strict local procurement rules could create bottlenecks, increase costs, and delay projects. In the short term, flexibility or targeted exceptions may be required to meet demand. Over time, the solution is to expand domestic capacity, so buying Canadian becomes more practical.

Interprovincial trade barriers could also slow progress. Governments can help by streamlining approvals for industrial expansion and resource development, ensuring long-term access to key raw materials, and investing in transportation and trade infrastructure.

Youngblut also emphasizes the need to invest in skilled trades and workforce development. “Even with more manufacturing capacity, we still need workers to build homes, schools, hospitals, and community infrastructure. We must invest in training and attract more people to the trades, which offer strong, essential careers,” he says. Team Canada Strong, the federal commitment to recruit and train more skilled trades workers, is a step in that direction.

The Build Communities Strong Fund and Buy Canadian policies will support an industry that is becoming more local, more advanced, and more productive, says Youngblut. Manufacturers are responding to demand for high-performance materials that speed up construction, reduce labour needs, and improve reliability. They are also prioritizing supply chain resilience by choosing strategic locations and securing raw material sources.

To shorten timelines, the industry is expected to expand the use of modular and off-site construction methods.