“It’s not a large market, so you have limited economies of scale. There’s probably limited access to a workforce that can build, so all of this is leading to significant challenges on construction costs.”

The lack of affordability has led to a growing need for the model that Newton’s group is championing. The land trust is nearing completion on its first major project, a 32-unit housing complex in Whitehorse that will allow locals to buy at a discounted price thanks to land donations, federal and territorial funding, along with “efficient” design.

The development is built with local conditions in mind, with features such as fireproof siding.

“We have kept environmental, energy-efficient and sustainable designs at the top of our priority list because we believe that affordability is not about building cheap, it’s about building durable and it’s about building for the future,” said Newton.

In addition to long and often harsh winters limiting when construction can take place, many materials need to be shipped from larger cities, which doesn’t happen overnight.

“We’ve had to order kitchen cabinetry from down south … and that’s been really challenging because if anything was missing or mis-ordered, it’s not like you can just run over and pick the thing that you need up,” said Newton.

“There’s timeline delays on getting certain things in at specific times because of that.”

The CMHC’s report said the North presents unique challenges, but also “opportunities for innovation.” That includes “more regionally responsive design and energy-efficient housing solutions that respond to Northern and Arctic conditions.”

It highlighted projects like the Kivalliq Long-Term Care Facility in Rankin Inlet, Nvt., which incorporates building orientation, thermal performance strategies, natural light and passive and mechanical heating systems to enhance comfort under Arctic conditions.

Arcan Group, a general contractor and design company based in the Northwest Territories, has turned to building “ready-to-move” homes for the past four years, as part of a partnership with the Hay River Métis community.

Hughie Graham, director of partnerships and development for the company, described the model as “hybrid modular construction.” Components of homes are built year-round in a tented facility, rather than at construction sites when the elements allow.

Those pieces are then transported to local communities to be put together on-site.

“We build homes there that are engineered for Arctic conditions,” he said, adding the North “doesn’t need southern solutions for building.”

Graham said prefabrication improves quality control and limits weather-related delays. While many modular housing units in the region have come from Southern Canada over the years, he said some don’t meet the standards needed for northern conditions.

Arcan’s design, he said, allows for “highly energy-efficient structures with modern mechanical systems” that are built to last longer. The style includes additional exterior insulation, and also avoids the board and batten which southern builders sometimes use so they don’t have to worry about drywall cracking during transportation.

“The cost of heating a place in Ulukhaktok, for example, is three times what it is in Yellowknife, and Yellowknife is three times what it is out of Calgary,” said Graham.

“So if we can make an energy-efficient product, it’s less costly to provide utilities for.”

To date, Graham estimates Arcan has built homes in about half of the Northwest Territories’ 33 communities. But he said builders collectively haven’t made enough of a dent in the North’s overall supply crunch, and the biggest challenge they’re facing is attracting workers.

He said as populations continue growing and existing infrastructure ages, labour is the area where the industry stands the best chance at lowering costs.

“We know that there’s such a shortage of housing that if you’re going to throw 500 homes into the Northwest Territories today, you have not scratched the surface of how much housing needs to be built in the North,” said Graham.

“If we could get some federal and territorial investment … to offset the labour, that’s probably the largest component of the cost of construction. If we can offset that somehow, items start to become more affordable.”

This report by The Canadian Press was first published Aug. 16, 2026.

Sammy Hudes, The Canadian Press