Canada’s insurance sector is calling for more time and data before it can fully evaluate mass timber as a building material, even as its use spreads rapidly across the country, according to a recent policy brief by the Insurance Bureau of Canada (IBC).
John McKee, a policy adviser at IBC, said the growing popularity of mass timber in residential, commercial, and institutional developments has prompted questions from insurers about how these structures hold up over time, particularly against water and fire damage.
Mass timber is a group of engineered wood products created by layering, bonding, and compressing pieces of wood into structural components such as panels, beams, and columns. It is increasingly being used as an alternative to concrete and steel.
According to the IBC brief, Natural Resources Canada tracks more than 850 mass timber projects nationwide, alongside nearly 20 manufacturing facilities. British Columbia leads the country in both construction volume and production capacity, followed by Ontario, Quebec, and Alberta.
Building codes have evolved to reflect this growth. In 2020, the National Building Code of Canada permitted encapsulated mass timber construction for buildings up to 12 storeys. British Columbia, Ontario, and Quebec have since introduced amendments allowing such structures to reach up to 18 storeys.
Despite the material’s growing footprint, insurers remain cautious. The IBC brief identified three key gaps in available data: long-term structural performance over several decades, the effects of moisture and water-related incidents, and typical repair and replacement costs following fire or other damage.
Reinsurance capacity for mass timber projects, particularly mid- to high-rise developments, has also been constrained, which the brief noted directly affects the availability and terms of primary coverage.
Insurance broker Aon has noted that limited long-term loss history makes it more difficult for insurers to model risk with the same level of confidence they apply to more established building materials, according to the IBC.
Mass timber does carry several noted advantages. Its lighter weight gives it potential resilience under wind and seismic stress. When exposed to fire, the material forms a surface char layer that helps protect its structural core. It also stores carbon throughout its life cycle, giving it a lower carbon footprint than concrete or steel.
The IBC brief said that as more mass timber buildings are completed and observed over time, the insurance industry’s understanding of long-term performance is expected to grow.
Efforts to close the data gap are gaining traction at both the industry and government level. In June last year, the Climate Smart Buildings Alliance (CSBA) and the Canadian Wood Council (CWC) released a Mass Timber Insurance Strategy, led by Scius Advisory, identifying priority research areas – including real-world fire, smoke, and water damage testing on mass timber structures, and evaluating moisture management during construction and operation. The strategy noted that better access to aggregated repair data and realistic testing results would help insurers more accurately assess and price risk, with insurance capacity expected to expand as the evidence base grows.
On the federal level, the government announced in December 2025 that the Climate Smart Buildings Alliance was receiving $272,000 to conduct a feasibility and prototype-level assessment of potential solutions to address insurance challenges faced by the mass timber construction industry.
