The Residential Construction Council of Ontario (RESCON) is warning that tariffs imposed by the Trump administration will lead to price hikes for building materials and raise the price of a new home in both the U.S. and Canada.
“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 of the border. The U.S. National Association of Home Builders shares our view that tariffs and affordability are bad on both sides of the border,” said RESCON president, Richard Lyall. “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.
“Affordability is already a serious challenge for consumers on both sides of the border. It will drive inflation and costs higher right across the board which oddly contradicts the U.S. president’s stated objective of lowering prices and inflation. The uncertainty of tariffs slowed sales and rental construction on both sides of the border. Tariffs will drive this lower to no purpose.”
RESCON says the economic uncertainty created by tariffs will “almost certainly” lead to a slowdown in new housing construction in both the U.S. and Canada as supply chains are intertwined.
The U.S. imports large amounts of steel, aluminum, lumber, cement and gypsum for use in construction while Canada exported 6.56 million tons of steel to the U.S. in 2024. RESCON also noted that they rely on materials imported from the U.S. such as plywood, glass, metal fittings, light fixtures, ceramics, electrical parts, and plumbing and mechanical components. As a result, reciprocal tariffs will raise prices for those goods and supply chains will be disrupted as builders serarch for alternative sources for materials.
“This will have severe repercussions for the housing sector in the U.S. and Canada and we will undoubtedly have fewer housing starts,” said Lyall. “The tariffs will only undermine the industry, at a time when the residential construction sector is most in need of stability and certainty.”
RESCON says that if history has taught us anything, it is that “tariffs don’t work.” For example, levies imposed as a result of the anti-trade Smoot-Hawley Act of 1930 sparked a trade war between the U.S. and other countries and lengthened the Great Depression. RESCON also noted that in 2018, when tariffs were imposed by the previous Trump administration on certain imports of steel and aluminum from Canada, it was deemed a failure. Canada responded by imposing countermeasures against $16.6 billion of steel, aluminum and other products from the U.S. and in May 2019, both countries lifted their tariffs.
RESCON is part of the Canada United States Trade Council which will be providing governments guidance on trade issues facing Canada. They are calling on the Trump administration to immediately rescind the tariffs and instead, work with Canada to build a stronger and more reliable supply chain.
“Adding tariffs to the cost of building materials is irresponsible and reprehensible,” said Lyall. “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.”