Something from Nothing by Phoebe Gilman

From chapters.ca:
Throw it out! Cries Joseph's mother. So Joseph runs to his grandfather with his favourite blanket. Grandpa can fix anything. From the tattered blanket, Grandpa makes a handsome jacket. With a few passes of his needle, a vest becomes a Sabbath tie. And snip! Snip! A ragged handkerchief turns into a brand-new button. But when the button is lost, what's to be done? Even Grandpa can't make something from nothing!

I particularly enjoy following the parallel lives of the mice living under the floors of the human family in this book.