Industry experts warn of a commercial war looming with the United States in the housing market in Canada, which may increase the costs of construction and renewal on both sides of the border.
The United States and Canada are the best commercial partners for each other and the exchange of home building materials worth billions of dollars every year.
Home builders are preparing for the impact of trade war if US President Donald Trump pulled the trigger on February 1 with a 25 percent tariff for Canadian goods. Prime Minister Justin Trudeau said it supports the “dollar principle against the dollar definitions” if Trump continues his threat.
Kevin Lee, CEO of the Canadian House Builders Association (CHBA) said:
He told me that the revenge customs tariffs of Canada will increase the cost of construction, which affects the ability to afford housing and supply costs.
He said that “the greatest interest” of the housing market is the total impact on the Canadian economy.
“The economic slowdown or recession always translates directly into a fewer housing due to uncertainty, the loss of potential job, etc., so that this is the first concern of our industry.”
This comes at a time when home prices and housing activities are expected to rise after the “year of recovery”, according to real estate monitors.
Royal Lepage for the year 2025, which was released in December 2024, expected a six percent jump in the average home prices this year.
On the national level, the beginnings of housing increased by 2 percent on an annual basis in 2024, According to Canada Mortgage and Housing Company.
“Since Canada is looking to increase housing supply, starting housing will be a problem,” he told me.
“The real estate industry is linked to the total power of the economy and the high tariffs on Canada will harm its economy.
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“Long -term anxiety, how will this affect home construction? How will the employment numbers affect? How will this affect the confidence of the consumer?”
The governor of the Bank of Canada, who achieved the sixth successive interest rate on Wednesday, said that the trade conflict with the United States “could be very annoying to the Canadian economy.”
“The possibility of a commercial conflict resulting from a new American tariff on Canadian exports is a state of main uncertainty,” Tif Maclim said during a press conference on Wednesday.
In the short term, the growing costs of building materials can be transferred to home buyers.
He added: “Of course, the houses of reselling current housing will not be directly affected, but the renewal industry … will test the negative impact of the definitions, so it will be a difficult adjustment.”
What building materials can reach the most difficult?
Lee told me that glass products, devices, devices and ceramics are among the best houses building materials imported by Canada from the United States
He said that Canada annually imports glass products worth $ 3.5 billion, more than 3 billion dollars from major devices and $ 2 billion of devices from the United States
“These are some of the adults that directly affect housing building and thus the cost of construction.”
When it comes to primary minerals, including iron, steel and aluminum, Canada imported more than $ 14 billion from the United States in 2023, According to Canada statistics.
The vast majority of the United States Soft wood imports come from Canada.
Canadian wooden wood, which already faces the duties of the United States, can also be exposed to a Trump tariff. He told me that “it will be a big problem” because it may have an effect on long -term supply of wood products in Canada.
What can the effect on the housing market?
He told me that to prepare for the repercussions of the definitions, the suppliers have already started looking at alternative sources.
He said: “Our supply chains will be decisive in finding some alternative solutions to all this.”
If there is a silver lining for a potential trade war, Super said it will force Canada to “become more varied in the long run, which is good.”
He said: “People should remember that Canada is the state of G7, and it is one of the largest economies and the most dynamic on this planet, and we will adapt.”
He told me that there are immediate measures that the government can take to relieve the pain of trade war if it happens.
He said that things such as removing commodity and services tax on new homes and lowering high development taxes may have a long way in the face of the increasing costs that will come from the definitions.
– With files from Global News’ Craig Lord
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