Tariff talk: How it can affect the Canadian construction industry

by tanya_martins_2 | February 4, 2025 11:30 am

Partially constructed residential building with exposed wooden framing and workers installing the roof under a clear sky — Canada imports about $3.1 billion in appliances from the U.S. each year. *Photo ©Alison Hancock/courtesy bigstockphoto.com*

With the possibility of 25 per cent tariffs across the board announced by U.S. President Donald Trump last month and Canada retaliating with counter-tariffs on $155 billion in U.S. imports in two portions, the question arises: How does this looming decision impact the Canadian industry?

While the decision on tariffs is currently on hold, the Canadian Home Builders’ Association (CHBA) released a report advocating that construction goods not be included in these countervailing tariffs. The initial lists suggest that this has mainly been attained, except for steel and aluminum.

According to the report, Canada imports about $3.1 billion in appliances from the U.S. each year, so builders and suppliers would now need to look domestically and to other countries to avoid the price increase.

It is important to note that the Trump tariffs will have a much larger impact on construction costs and housing affordability in the U.S. than the tariffs under consideration in Canada.

While U.S. tariffs on the Canadian industry’s domestic products and materials exported to the U.S. could initially lower prices, the CHBA report predicts struggling manufacturers may be unable to do so.

Per the report, prices of glass and glass products, major appliances, hardware, and ceramic tile, among other materials, might skyrocket.

The effect of U.S. tariffs on the Canadian residential construction industry, housing supply, and home construction costs has the potential to be very significant.

Reduced exports, a weaker economy, and currency depreciation would also collectively influence construction costs, interest rates, and housing demand.