Canadian Construction Association Warns of Significant Impacts from New U.S. Tariffs

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The Canadian Construction Association outlines the potential impacts of escalating tariffs from the U.S. on the Canadian construction industry, emphasizing the need for government support and industry adaptation.

OTTAWA — The Canadian Construction Association (CCA) has issued a bulletin in anticipation of new and increasing counter-tariffs between Canada and the United States, highlighting which areas of domestic construction are likely to suffer the most and the support mechanisms available for the industry. The CCA's bulletin emphasizes that, "the bottom line for our industry, construction is a net importer of critical materials, and this list hits hard." On August 25, in direct response to a 50 percent U.S. tariff on Canadian exports, Canada announced counter-tariffs that match dollar-for-dollar on $27.6 billion worth of U.S. goods. These measures are set to take effect on September 8. The CCA warns that this trade conflict and its intensification will “cause significant disruption across Canadian job sites, delaying projects and raising costs. Ultimately, they will hinder Canada’s ability to build the infrastructure, housing, and trade corridors our economy requires.”
The bulletin outlines expected impacts on various materials:
- **Steel and Aluminum**: Tariffs on structural and derivative products are doubling from 25 percent to 50 percent.
- **Lumber and Wood Products**: Plywood, laminated veneer lumber (LVL), and sawn wood products will see tariffs ranging from 25 to 50 percent.
- **Additional Construction Inputs**: Numerous specific construction inputs, including fasteners, HVAC equipment, scaffolding, doors and windows, lifting machinery, and others, will face tariffs of 15 to 50 percent.
According to the CCA, based on the latest supply and use data from 2024, only 60 percent of all manufactured inputs utilized in Canadian construction are sourced domestically, with 25 percent coming from U.S. producers. The exposure to U.S. imports is particularly pronounced in engineering construction sectors, such as communications and oil and gas, where approximately 40 percent of inputs originate from the U.S., outpacing the domestic share.
While reduced exports may alleviate some capacity issues, Canada still lacks the production capabilities for every type of steel necessary for the construction industry, which may lead to increased costs for products that cannot be sourced domestically. To mitigate some of these impacts, the federal government is offering tariff relief for 179 steel mill products not produced within Canada. This initiative aims to alleviate the most pressing self-inflicted costs resulting from the counter-tariffs.
In addition, the Canadian government has announced a substantial support package amounting to $7.5 billion, on top of the $25 billion in economic aid provided since the onset of the trade dispute. This financial support will not solely consist of direct grants to businesses but will also encompass loans, regional financing, worker support programs, and funding for business adaptation projects. Eligibility criteria, availability, and application processes will differ by program, and comprehensive implementation details are still pending for some measures.
Key measures summarized by the CCA include:
- An additional $1.5 billion allocated for the Regional Tariff Response Initiative aimed at assisting small and medium-sized enterprises (SMEs) in coping with tariff-related pressures.
- An extra $2 billion directed through the Canada Strong Diversification Fund, which includes enhanced collaboration with regional development agencies (RDAs), as well as programming for project intake and triage.
- The introduction of a new suite of $3.5 billion for the Rapid Response Supports for Workers and Employers Initiative, which features extended employment insurance flexibilities, enhancements, and training opportunities through Job Bank.
- Increased flexibility in the Large Enterprise Tariff Loan facility managed under the Canada Enterprise Emergency Funding Corporation (CEEFC), extending liquidity support from 24 to 36 months.
- An additional $500 million to the liquidity stream under the Business Development Bank of Canada’s Pivot to Grow Program to help relieve cash-flow pressures, with amounts ranging from $250,000 to $5 million.
The CCA also reminds its members and the broader construction community that tariffs could affect individual projects differently based on specific contractual language. The Canadian Construction Documents Committee (CCDC) has previously published Bulletin 11 – Adjustments in Contract Price Due to Tariffs, which offers guidance on contractual considerations for tariff-driven cost changes. The CCA encourages its members to review this bulletin alongside their contracts when assessing potential exposure and to engage in timely and candid discussions with project partners regarding the impacts of tariffs.

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