Impact of Tariffs on Canadian CRE Construction Costs

Global Tariffs Have Reset the Cost Environment

What considerations should developers, contractors, and end users of CRE be aware of as trade policy shifts and the construction industry evolves?

We identify key considerations in the interactive report:

What lies ahead? 

Summer 2026 is a crucial point in the North American tariff landscape.  

Trade policy has materially amplified volatility and cost pressures across Canadian commercial real estate and infrastructure construction sectors. The Canada-U.S. trade dispute that escalated in early 2025 has fundamentally reset the construction input cost environment and, while some measures have been partially unwound, the remaining tariff architecture is both layered and durable.  

The Canadian construction sector is operating in a structurally higher cost environment, with limited near-term relief on the horizon. With Canada’s 25% counter tariffs on U.S. steel and aluminum, alongside surtaxes on non-free trade agreement steel imports exceeding quota thresholds, current conditions reflect more than a temporary disruption. This represents a new cost baseline.   

For builders and developers, this means construction input costs, particularly for metal-intensive building types such as industrial and logistics assets, are elevated. Substituting away from U.S.-sourced materials toward lower-cost global alternatives is no longer a straightforward hedge, as quota, surtaxes and domestic sourcing requirements have narrowed supply chain optionality. As a result, procurement increasingly requires country of origin diligence and earlier engagement with potential suppliers. 

Looking ahead, the formal CUSMA review is the most consequential policy event on the horizon. Regardless of the outcome, the practical implication is that historical cost and feasibility assumptions are no longer valid reference points. Construction budgets, return thresholds and contingencies must now be recalibrated and ongoing trade-policy monitoring both within North America and globally is now a permanent feature of project underwriting. 

¹ Subject to U.S. Surtax Order 2025 S53(2) (Steel and Aluminum 2025)