Canada’s Plan to Become the Prefab Construction Capital of the World

America’s trade war is creating some interesting side effects. Countries around the world are starting to think about how they will be able to survive with lower American demand for their products. Canada is one of those countries. Lumber is one of Canada’s largest exports and America is its largest foreign market. Approximately 60% of Canada’s softwood lumber production is exported to the United States. Now Canada is bracing for a drop in exports to its largest trading partner to the South. In the new tariff regime, Canadian softwood imports will face a 25% tax. This new levy is in addition to an existing effective duty rate of approximately 14.5%, bringing the total effective tariff on Canadian lumber to nearly 40%. Some politicians think that they have a way to spur domestic use of Canadian lumber: by growing the country’s prefabricated construction industry.

The current Canadian Prime Minister has proposed creating a new government entity called Build Canadian Homes...