In Canada and beyond, there is growing demand for sustainable, lower-carbon solutions in construction. Tall wood buildings can be an integral part of meeting this demand. Mass timber can match or exceed the structural performance of concrete-and-steel while reducing carbon emissions by as much as 45 percent. While there are additional economic benefits to mass timber construction, there are also unique regulatory challenges. Jason D. Roth and Mark V. Lewis, partners at Bennett Jones LLP, anticipate mass timber buildings to be much more common within the next 5-10 years. We spoke to them about what developers need to consider when approaching mass timber construction products.
How are regulations in Canada changing to meet the demand for mass timber?
Building code regulations are changing to allow for taller wood structures.
The new National Building Code of Canada was released in March 2022. One of the highlights is the inclusion of encapsulated mass timber construction to allow for wood buildings up to 12 storeys tall. British Columbia was the first Canadian province to amend its Building Code to permit 12 storey tall wood construction.
Ontario's Building Code was updated in 2015 to allow wood frame buildings up to six storeys, an increase to 12 storeys is proposed for the next edition.
Which provinces are leading the way?
British Columbia and Ontario. Hundreds of new projects are planned or underway in the provinces. And B.C. is aiming to supply more wood and make more value-added wood products available in the province.
British Columbia currently has more mass timber buildings per capita than anywhere else in North America. Vancouver is home to the tallest mass timber building in Canada, the 18 storey Brock Commons at the University of British Columbia. It was the tallest timber structure in the world when it was completed in 2017.
B.C. launched its Mass Timber Action Plan in April 2022 as a roadmap to grow the industry. As part of the plan, the provincial government says it will work closely with industry and researchers to identify and overcome regulatory barriers.
Also in April 2022, the City of Toronto announced a new mass timber pilot program for affordable rental housing, using wood products that must be certified by the Forest Stewardship Council (FSC) or CaGBC-approved equivalent. In a separate project, a 10 storey institutional building for George Brown College is already under construction in Toronto.
In Saskatchewan, the province's first mass timber multi-family residential building was recently announced. The five storey condo project is planned in Saskatoon.
Is the approval process for mass timber construction different?
The approval process for mass timber buildings is not as certain as other projects. Mass timber construction is still relatively new in Canada and the regulatory system is evolving with it. Developers should consider the potential for uncertainty and delays and address this risk in their project scoping and scheduling activities.
What do developers need to think about when it comes to the supply of mass timber?
The supply of mass timber products, such as cross-laminated timber, is critical to a project's success. Mass timber products typically makes up a large percentage of overall project material costs. The source can affect cost, schedules and overall ESG aspects of a building.
It is very important to know if the product is sourced in Canada or overseas, as trade issue risk should be assessed for any project. Tariffs and supply chain disruptions may be concerns if the products do not come from Canada. Contractually, as the product is so critical to the project, we typically see developers designate the product source/supplier in a construction (CCDC) contract to avoid issues.
What are some other contractual issues developers need to consider?
Using mass timber is very different from concrete-and-steel construction. Developers should seek professionals, builders and trades who have experience with mass timber buildings and a well-developed plan to complete the project. The construction contract should contain sufficient covenants to confirm such experience. Consideration should also be given to including provisions mandating the use of certain product suppliers. A review of standard warranty provisions to confirm appropriate for the specific products used should also be considered.
The insurance requirements for mass timber projects and the timing to place such insurance should be confirmed and priced in advance to avoid delays and cost surprises.
What are the ESG benefits in mass timber construction? Are there potential risks?
Developers in B.C. may be able to generate carbon offset credits under the province's Offset Protocol. This policy is still under development, however, and the B.C. government intends to release a finished protocol this year.
ESG benefits are more than environmental. B.C.'s Action Plan supports reconciliation by co-creating tangible economic and social opportunities for Indigenous people in the mass timber economy.
Developers must plan for the entire life cycle of a mass timber building to realize all of the low-carbon benefits. Wood that ends up in a landfill will release its carbon back into the atmosphere, so planning for the reuse of building materials or using capsulated wood products is a necessary step.
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Jason Roth is a partner at Bennett Jones and head of the firm's construction law practice group and capital projects industry team. He practises law related to infrastructure development projects. Jason is a member of the Canadian Bar Association construction practice section, a member of the British Columbia Construction Roundtable and a fellow of the Canadian College of Construction Lawyers.
Mark Lewis is a partner at Bennett Jones and practises in the areas of real estate development, commercial lending and commercial real estate leasing, with an emphasis on residential, commercial and resort developments, and commercial financing transactions. Mark is ranked by Lexpert and other Canadian and global legal directories as a leading lawyer in real estate law.