Here is the response I received from the local building inspector:
"In response to your enquiry we wish to advise the following:
Your query is two-fold; Densglass is an approved sheathing product having been evaluated by CCMC. However, the sheathing is not required in this application at Empire Communities.
Allow me to explain;
1. The sheathing required for wind or lateral bracing is achieved by the installation of gypsum board (drywall) on the interior of walls,
2. The cladding products used by Empire (brick veneer or vinyl siding) are attached directly to framing members without need for backing,
3. Empire's use of sheathing is considered an extra by their construction standard,
4. Further, the OBC does not give nailing patterns or loading criteria for sheathing. Where sheathing is required the OBC stipulates the minimum thickness of sheathing required and provides that sheathing is attached directly to framing.
We can advise that homes constructed by Empire Communities are built to the requirements of the OBC. Your concern for the "lack of bracing" will be addressed when interior finishing takes place."