Yesterday, Carney unveiled a polarizing plan to jumpstart Canadian housing construction to 500K units per year over the next decade through the creation of a new federal entity, Build Canada Homes (BCH).

The plan was lauded by some and criticized by others in favour of less government involvement, who point out that we’ve seen past promises for government-induced housing construction fail to be implemented effectively.

One thing is for sure: for housing affordability to improve, supply must improve.

There were a lot of incentives for multi-family construction, including a 50% haircut off municipal development charges for 5 years and the ability to use depreciation and other costs to offset unrelated income.

With this, we’d expect to see multi-unit continue to eat up more share of total construction.

Which companies are in play?

With $25B in debt financing and $1B in equity financing to be allocated by BCH, there are a number of Canadian companies positioned to benefit across the home building value chain.

Lumber producers would be likely beneficiaries of higher demand, with Carney explicitly targeting Canadian softwood lumber to support the buildout.

Interfor (IFP) is the only lumber pure play in Canada, with >80% of its revenue from softwood lumber, but vertically integrated players like West Fraser (WFG), Canfor (CFP), and Doman (DBM), and finished product producers like Richelieu (RCH) should benefit too.

Each of these companies has heavy U.S. exposure too, capping some upside.

There was a notable focus on affordability as well, with $10B in low-cost financing for affordable housing, $6B of which is allocated for “deeply affordable” housing.

This would benefit names like Bird Construction (BDT), and Atco (ACO-X), who have varying degrees of modular structure exposure.