Ontario Construction News staff writer
The Residential Construction Council of Ontario (RESCON) says it expects serious consequences for the homebuilding industry on both sides of the border if US tariffs come into place.
“Ontario’s residential construction industry, like many others across the country, is bracing for the impact of the tariffs,” said RESCON president Richard Lyall, before US president Donald Trump agreed to a 30-day pause on the tariffs. “The residential construction industry is already challenged. The move is reckless and will cause economic hardship in both the U.S. and Canada, affecting tens of billions of dollars in trade of construction materials alone.
“Such levies will only increase costs and lead to a further slowdown in residential construction activity, which will exacerbate an already dire housing affordability crisis.”
The new round of tariffs is seen as a more significant escalation than the previous measures imposed by the Trump administration in March 2018 on certain steel and aluminum imports from Canada. The tariffs were met with retaliatory measures from Canada, targeting $16.6 billion worth of U.S. products. Both nations lifted these tariffs in May 2019, but the reimposition has sparked renewed concerns.
“No one will benefit from an arbitrary increase in material and product prices. Our countries and supply chains are intertwined and dependent on each other, so nobody wins in a tariff war,” Lyall said. “Homebuilding industries on both sides of the border will be negatively affected. Our industry relies heavily on imported materials from the U.S. A tariff war only makes imports more expensive and will add to the cost of building a home.
“Likewise, Americans will suffer as U.S. homebuilders rely on Canada to fully meet their lumber needs.”
According to the National Association of Home Builders, Canada and Mexico account for nearly 25 percent of the building materials imported into the U.S., with over 85 percent of that lumber coming from Canada. Canada is also the largest foreign supplier of steel and a key supplier of aluminum to the U.S. Both of these materials are crucial for residential construction. U.S. imports from Canada also include cement and gypsum, vital for drywall production.
Tariffs will likely force Canadian builders to seek alternative suppliers, including domestic producers or sources from other countries. However, Lyall warned that such adjustments would lead to delayed or canceled projects and increased costs. This disruption could deepen existing housing shortages and further drive up prices.
Conservative think tanks have also expressed concerns, arguing that U.S. companies will simply raise their prices and pass the costs onto consumers. The budget lab at Yale has estimated that tariffs could increase costs for U.S. families by between $1,900 and $7,600 annually.
RESCON is a member of the Canada-United States Trade Council, an industry coalition that provides guidance to governments on trade-related issues. The group has criticized the decision to break the free trade agreement, noting that it could force Canadian operations to relocate to the U.S., a move they consider unacceptable.
“The tariffs being imposed by the Trump administration are simply a bad idea and will only cause chaos and higher prices,” Lyall concluded. “The U.S. action is a high-risk gamble to increase U.S. revenues to offset tax cuts and deflect from other actions being taken by the Trump administration that are unrelated to Canada or Mexico. Using tariffs as a hammer will only backfire.”
