{"id":17822,"date":"2025-02-21T17:45:08","date_gmt":"2025-02-21T17:45:08","guid":{"rendered":"https:\/\/torontotribune.ca\/index.php\/2025\/02\/21\/how-trumps-tariffs-could-hurt-canadas-home-construction-industry-national\/"},"modified":"2025-02-21T17:45:08","modified_gmt":"2025-02-21T17:45:08","slug":"how-trumps-tariffs-could-hurt-canadas-home-construction-industry-national","status":"publish","type":"post","link":"https:\/\/torontotribune.ca\/index.php\/2025\/02\/21\/how-trumps-tariffs-could-hurt-canadas-home-construction-industry-national\/","title":{"rendered":"How Trump\u2019s tariffs could hurt Canada\u2019s home construction industry – National"},"content":{"rendered":"


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With the threat of tariffs<\/a> still looming from the U.S., homebuilders in Canada are warning that the uncertainty could impact construction at a time when people are struggling to get into the market.<\/p>\n

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Earlier this week, the Canada Mortgage and Housing Corp. (CMHC) released its housing starts report for January, which showed the annual pace had risen by three per cent since last year.<\/p>\n

But tariffs could pose an issue \u2014 in particular, around two \u201cmajor concerns.\u201d<\/p>\n

\u201cOne is: how this is going to impact inflation on goods that are consumed by people in Canada and also, what are the consequences on the labour market?\u201d CMHC deputy chief economist Kevin Hughes said.<\/p>\n

\u201cThen as a consequence of that, how would the housing market, or let\u2019s say supply and demand, be impacted by that?\u201d<\/p>\n

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He noted there will be a potential shock to the economy if tariffs are imposed, but it depends on the specifics of what is implemented.<\/p>\n

His comments echo similar remarks by fellow CMHC deputy chief economist Tania Bourassa-Ochoa, who wrote in Monday\u2019s housing starts report that trade risks pose \u201csignificant uncertainty\u201d for the market.<\/p>\n

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The initial impact, however, may be less on materials used in construction and more on the economy.<\/p>\n

\u201cIf we end up with some sort of economic downturn as a result [of tariffs], that invariably leads to less sales and less housing starts at a time when we need more housing starts,\u201d Canadian Home Builders\u2019 Association CEO Kevin Lee said.<\/p>\n

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\u201cSlowdowns in sales leads to slowdowns in starts.\u201d<\/p>\n

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Unlike in 2022, when housing was being sold at record paces, the market has slowed considerably following a number of interest rate hikes by the Bank of Canada.<\/p>\n

That\u2019s left a larger inventory of houses available for buyers.<\/p>\n

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That can leave builders questioning whether to build more in a time of uncertainty, said Scott Andison, CEO of the Ontario Home Builders\u2019 Association.<\/p>\n

He said a builder takes risks when taking on a housing project with financing, sourcing materials, putting together staff, and determining costs and then interest from the public.<\/p>\n

\u201cYou\u2019re trying to predict how many people are going to be stepping up to buy those homes you\u2019re building, and builders need predictability and they need stability when it comes to these projects,\u201d he said.<\/p>\n

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Canada is seeing a buyer\u2019s market right now because of lower interest rates, but the looming tariffs could put some Canadians off from buying, according to Clay Jarvis, NerdWallet\u2019s housing expert.<\/p>\n

\u201cIf you have something like these tariffs and any sort of associated job losses, that might be a part of it that\u2019s just going to put another dent into the demand for the new build,\u201d he said.<\/p>\n

\u201cSo if you\u2019re a builder, are you going to commit to a project, are you going to charge your buyers a lot more money at a time when they\u2019re not interested in buying your product anyway?\u201d<\/p>\n