Trade wars between the US and Canada have been front of mind for the first half of 2025. There have been several predictions over the months calling for increased prices, construction delays and supply chain disruptions. We’ll look at a series of forecasts over a three month period as the situation has changed and evolved. Then we’ll examine actual price fluctuations for eleven products used in residential construction. Finally, we’ll reflect on whether these findings match the predictions about the cost of goods in the construction industry.
Recent Economic Trade Conditions
On 03 February 2025, the Canadian Home Builder’s Association made two prediction. First, that the then proposed US tariffs and retaliatory Canadian tariffs would degrade housing affordability. Second, that it would have substantial effects on the costs of home construction with a focus on steel and aluminum. These international actions would cause Canadian mills to shut down. There was also concern about the devaluing of the Canadian dollar.
On 06 March 2025, Green Building Canada predicted that the retaliatory tariffs would be disruptive resulting in stalled projects and market inefficiencies. They claim the immediate effect would be rising costs and longer timelines as adjustments are made. Although some of the previously imported goods could be sourced domestically, new supply chains are not expected to be as cost effective. Expected secondary effects are reduced consumer confidence, job insecurity, and homeowners discouraged from remodeling their homes. Overall impacts would be higher inflation and a weaker Canadian dollar.
On 11 April, 2025, Construction Dive wrote about the immediate effects of the Trade Wars on the Canadian Construction Sector. Stocks in two Canadian engineering firms impressively outperformed seven US engineering firms in the same sector. Canadian pension plans penetrate further into the shareholder base of these companies than do their US counterparts. Foreign exchange rates benefit Canadian companies. The effects seen at the retail level are related the overall economic landscape rather than to specific tariff policies. Canada will be more resilient to the uncertainty of fluctuating tariffs. These predictions refer to the stock value of companies. What do these predictions say about the price of building materials? They claim it will impact supply chains which result in costs increases and construction delays. Lumber goes south (to the US). Machinery, equipment, and steel goes north (to Canada). Analysts predict disruptions in these areas.
Near Future Policies
On 19 June 2025, Prime Minister Mark Carney announced steps to protect Canadian steel and aluminum industries. In addition to ongoing negotiations and counter-tariffs, federal procurement contracts will be limited to “reliable trading partners”. These procurement contracts will also require the use of Canadian steel and aluminum. Two federal task forces will monitor the situation and provide advice with an eye to identifying and abolishing any unfair trade practices or overcapacities.
As reported by Global News on G7 Summit in Kananaska, Alberta: Carney’s reaction to the uncertain but evolving financial situation is to safe guard workers and businesses by strengthening international partnerships, and enacting a series of counter measures when the latest negotiation period with the US ends, which is on 21 July 2025. This protectionism will take two forms: (i) adjust existing counter tariffs, (ii) reciprocal procurement rules.
Cost of Goods: Data Collection
In Late Fall 2024, I was pricing a four-plex in Saanich. That involved quotes from vendors and online pricing from Big Box stores. On 06 December 2025, I recorded a list of Big Box store items and their prices in a spreadsheet. The list included items needed for electrical, wash, and safety stations during deconstruction, foundation, and framing. The last of the twenty-one items were finishing products: interior doors, engineered flooring, and baseboards and casements.
We included items such as dimensional lumber, finished lumber products, finished petroleum-based products, metal fixtures, and goods which could easily be used on a construction site or elsewhere.
The following table contains the list of items, which are grouped by category. The prices, as of 06 December 2025, of these materials and goods are listed in the third column. At the time I did this initial price hunt, I pasted the url for each individual material from the Big Box Store into an adjacent column in the original spreadsheet.
On 19 June 2025 , I simply clicked on each link and went to the exact same Big Box Store webpage that I visited earlier. This allowed me to record the current June 2025 prices for the exact same items. The dates of the comparison are just over six months apart. I then calculated the percentage difference and placed those numbers in the last column.
Material Costs of Goods: Difference over Six Months
Of the 21 items that were tracked, the prices of nearly half of them stayed the same. The cost of goods of the manufactured materials, that didn’t fall into a specific category, stayed the same. Most of the lumber prices dropped over these six months, some by 9.0% & 9.5%. The ones that did rise, rose nominally: +2.1% & 3.3%. This could be the result of seasonal fluctuations in lumber prices. Then the question becomes: Is the effect of the tariffs negligible compared to seasonal fluctuations?
Four items increased in price more than +10%. Three rose significantly: an electrical item from Schneider-Electric, one of the bi-fold doors, and the engineered flooring. Schneider-Electric is an international company with office in Canada and the US. The flooring doubled in price. I wasn’t able to confirm the country of origin for any of these three items.
The only items to have country of origin labels on the Big Box store’s webpage were the lumber. Manufacturers labeled six of seven as “Made in Canada with Domestic and Imported Parts” or “Product of Canada”. The unlabelled lumber, pressure treated plywood, was manufactured by the same company as the pressure treated 4×4, which the only one to mention “Imported and Domestic Parts”.
This spot list of price increases is consistent with Normac’s forecasted 3% – 9% construction price increase for British Columbia in 2025.
Reflections
The predictions, although repeated across months and from a variety of sources, don’t seem to have materialized. The fear and uncertainty seems to be bigger than the actual effect. The domestic lumber sector and Canadian pension practices may be, directly and indirectly, tempering potential retail price increases in the residential construction sector.
A second factor may be putting downward pressure on retail prices of construction materials: reduced demand. The fear and uncertainty may be stalling and cancelling existing and proposed construction projects. That reduced demand may counter-balance tariff-induced price increases. However that balance resolves itself, that fear and uncertainty will have a devastating effect on the national housing market and its affordability.
To find out how the cost of goods in the construction industry will affect your potential Gentle Density housing project, get in touch with David for a free consultation.
Price Difference of Select Construction Materials and Goods
