Modular Building Institute
Permanent Modular Construction Annual Report 2019 | Modular Building Institute

Canadian Market Overview

MBI represents 60 companies based in Canada, including 26 manufacturers of modular structures. In all, MBI estimates that there are about 45 total modular manufacturers in Canada fabricating for a variety of markets including residential, multi-family, commercial, educational, and industrial sectors. MBI directly obtained revenue data from eight Canadian manufacturers.

SEDAR ( is the official site that provides access to most public securities documents and information filed by issuers with the 13 provincial and territorial securities regulatory authorities (“Canadian Securities Administrators” or “CSA”) in the SEDAR filing system. MBI also obtained relevant information from annual filings on the following companies:

ATCO Ltd. was incorporated under the laws of the province of Alberta and is listed on the Toronto Stock Exchange.

Horizon North Logistics Inc. is a corporation registered and domiciled in Canada and is a publicly-traded corporation, listed on the Toronto Stock Exchange under the symbol HNL.

On average, manufacturers in Canada generated approximately $11,012,676 in revenues and drove approximately $901 million in construction projects. Overall non-residential construction put in place for key modular markets declined 16 percent for year end 2018 to approximately $25 billion CAD, compared to year-end 2017. This excludes single-family residential and engineering (bridges, highways, infrastructure).

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Across Canada, construction starts in the education market declined 8.6 percent to approximately $3.76 billion. Other drivers of the decline include healthcare (43 percent decline year-over-year) and the multi-family sector (15.8 percent decline).

The administrative and office sector showed five percent growth to approximately three billion dollars. Healthcare and education markets are forecast to rebound in 2019 while the multi-family sector (Canada’s largest market opportunity) stabilizes around $12 billion annually. Historically, one of the key markets for the modular industry in Canada has been the industrial workforce housing sector. The modular industry provided temporary workforce housing solutions in remote regions where the energy sector was active. With the decline in oil prices in recent years, the industry has diversified into some of the above mentioned markets more aggressively.

Construction industry activity in key modular markets is forecast to hover between $25-$26 billion for the next few years according to Construct Connect Insights.

2020 Modular Construction Industry Reports from the Modular Building Institute

Western Canada (British Columbia, Alberta, Saskatchewan)

Overall construction starts in this region dropped from approximately nine billion dollars in key markets in 2017 to $6.6 billion in 2018. It should be noted that hospital construction account for $1.3 billion of this decline, often indicative of a large project ending in the prior year. Overall construction is expected to bounce back and exceed 2017 figures, topping $10 billion annually by 2020.

Like other regions, the multi-family market is the biggest opportunity for the industry, despite a decline from $4.1 billion in 2017 to $3.2 billion in 2018. This market is forecast to rebound and approach five billion dollars in new construction by 2020.

The education sector declined slightly but remains consistent at $1.2 billion and is expected to reach $1.3 billion by 2020. The office and administrative market were just below one billion dollars annually, but is forecast to double to nearly two billion dollars by 2020.

Alberta showed strong growth in construction for educational facilities in 2018, while British Columbia led the way in multi-family construction at $2.6 billion. The multi-family market also shows the most promise for growth in Saskatchewan from $50 million in 2017 to $255 million by 2020.

This region, more so that Eastern Canada, was negatively impacted by the downturn in the workforce housing market. In the past, it was not uncommon for companies in the industry to generate more than 80 percent of their revenues from the workforce housing sector. In 2018, no Canadian manufacturer providing data to MBI reported greater than 20 percent of their revenue from this sector.

Energy Sector Not Dead Yet

Even though many modular manufacturers have scaled back on workforce housing for the oilfields in northern Alberta, there are still signs of life building for this sector. Alberta-based ATCO Structures and Logistics began construction on the LNG Canada workforce accommodation contract in the first quarter of 2019 and will continue work until early 2021. The 4,500-person facility is being built to house workers involved in the construction of LNG Canada’s natural gas liquefaction and export facility in Kitimat, British Columbia.

Modular Construction Used to Address Social Issues in B.C.

One company in the region that made the shift away from workforce housing was Horizon North. Until four years ago, constructing housing for workers in Alberta’s oil patch had been a hefty part of Horizon North’s business. Then, the price of oil crashed and so did the demand for thousands of quickly built apartments at remote locations in the province.

“Instead of laying off 300 people in Kamloops, British Columbia, the company decided to pivot,” said Rod Graham, Chief Executive of the Calgary-based company.

In 2017, the provincial government of British Columbia pledged nearly $300 million to build 2,000 modular housing units to address homelessness. Under its “Rapid Response to Homelessness, the province is more than half way to that goal, having delivered over 1,200 units. The program has been such a success, that in the 2019 budget, the province announced another $76 million to build an additional 200 modular units.

Metric Modular in Penticton also helped supply the first round of 2,000 homes. The initiative to build apartments for the homeless is now the inspiration for a broader move to provide affordable housing for income earners priced out of the traditional home market due to the higher cost.

Eastern Canada (Atlantic Provinces, Ontario, Quebec, Manitoba)

Overall, construction activity in the Eastern Provinces declined 11.4 percent from $20.6 billion to $18.3 billion in 2018. The biggest market decline was in the hospital/healthcare sector. This decline could indicate a larger project was completed in the prior year. Ontario led this region with 64 percent of all construction activity reported.

The multi-family sector accounted for nearly half of all regional construction activity in key markets at $9.1 billion. However, this sector is forecasted to drop significantly over the next two years, with reductions in multi-family housing projects in Ontario as the main driver.

Construction of fire and police stations more than doubled in 2018, while the office and administrative sector showed slight growth year-over-year. The education market dropped 11.2 percent in 2018 but remains one of the largest market opportunities at just over $2.5 billion in activity.

This region is forecasted to drop again in activity in 2019, before rebounding in 2020.

One key point to consider when evaluating modular activity in Eastern Canada is the impact of modular exports to affordable housing-starved areas of the northeastern United States. One such regional factory makes about 600 apartments and hotel rooms a year, many of which have constructed for housing developments in Massachusetts.

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