Housebuilders on either side of the 49th parallel have warned that President Trump’s 25% tariffs on Canadian imports, and Canada’s retaliatory tariffs, would drive up the cost of residential construction and stoke the housing affordability crisis in both countries.
“The residential construction industry on both sides of the border is already in dire straits due to a perfect storm of issues and this completely unwarranted and reckless act will only cause more economic hardship for builders on both sides,” said Richard Lyall, president of the Residential Construction Council of Ontario (Rescon).
“Tariffs will make it more costly for building materials and, in the end, the costs of these unnecessary levies will be passed on to consumers. This will lead to a further slowdown in residential construction activity and exacerbate our already dire housing affordability crisis,” he added.
Rescon said Canada exported 6.56 million tons of steel to the US in 2024, and that 56% of aluminum imports to the US came from Canada in 2023.
Going the other way, Canada imports plywood, glass, metal fittings, light fixtures, ceramics, electrical parts, and plumbing and mechanical components from the US.
“Adding tariffs to the cost of building materials is irresponsible and reprehensible,” Lyall said. “It benefits no one and only adds to the cost of building a home. One tariff begets another until we are in a full-blown trade war. Tariffs are simply a bad idea and only result in chaos and higher prices for homes. There will be no winner in this trade war. Both countries will lose.”
‘Tax on builders’
In the US, the National Association of Home Builders (NAHB) noted that President Trump had prioritised cutting housing costs and boosting housing supply to ease the country’s housing affordability crisis.
“The administration’s move to impose 25% tariffs on all steel and aluminium products imports into the US runs totally counter to this goal by raising home building costs, deterring new development and frustrating efforts to rebuild in the wake of natural disasters. Ultimately, consumers will pay for these tariffs in the form of higher home prices,” said NAHB chair Carl Harris.
NAHB said the new tariffs on steel and aluminium would raise costs “by several billion dollars, adding layered costs that could substantially impact builders’ ability to deliver new single-family and multifamily projects”.
The association said tariffs act as a “tax on American builders”.
Complex but simple
Builders warn that many fabricated building components cross borders multiple times in the highly integrated North American manufacturing supply chains, making it difficult to calculate the final cost hikes.
But in another way, the math was “pretty simple”, said Jeffrey Shoaf, chief executive of the Associated General Contractors of America.
“The more contractors have to pay for the materials they need, the more it will cost to build new infrastructure, housing and economic development projects. As much as want to see new domestic manufacturing capacity, stifling construction activity is clearly not the best way to help.”
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