Tariffs negative impact on overall economy will likely slow down housing starts
March 4, 2025 – Ottawa, ON – Today on Parliament Hill during a press conference to release the third CHBA Municipal Benchmarking Study, Canadian Home Builders’ Association (CHBA) CEO Kevin Lee took the opportunity to speak about how the U.S. tariffs and Canada’s countervailing tariffs would likely impact Canada’s residential construction industry.
While the U.S. tariffs of 25% on Canadian will be problematic, directly they will have a muted effect on construction costs here in Canada. Canada’s countervailing tariffs will affect our construction costs here at home, though the government is trying to be strategic to limit that impact. Meanwhile, the U.S. tariffs will have an even more profound impact of driving up construction costs in the U.S.
For Canadian home building, the greatest impact of U.S. tariffs will be on Canada’s overall economy. A slowing economy invariably means slowing housing starts, which will have expansive repercussions on housing supply, Canada’s residential construction industry, and long-term affordability.
CHBA has been in dialogue with the Government of Canada regarding countervailing tariffs, with the primary recommendation of avoiding tariffs on construction materials. However, given the need to combat the U.S. tariffs with Canada’s own tariffs, CHBA has also been working closely with government officials to provide advice to best target U.S. imports with the minimum impact on Canadian businesses and construction costs.
CHBA CEO Kevin Lee speaking about tariffs on March 4. Watch the recording here.
Lee stressed that the key is to end the trade war as quickly as possible, on fair and acceptable terms for Canada, and that in the meantime governments should take immediate steps to offset tariff-imposed increased costs of construction. CHBA’s Municipal Benchmarking Study outlines ways in which municipalities and other levels of government can help.
“Reducing development charges [in cities where they are high]…could more than offset any increased construction costs from tariffs. Measures to speed up approval processes can also save costs to offset increases from tariffs. And, at the Federal level, we’ve long called for fixes to the GST on new home construction, and again, those fixes could offset tariff costs, and, like development charges, should be fixed anyway,” said Lee.
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About the Canadian Home Builders’ Association
The Canadian Home Builders’ Association (CHBA) is the voice of the residential construction industry in Canada, representing some 8,500 member firms across the country. Our membership spans new home builders, renovators, developers, trade contractors, building material manufacturers and suppliers, lenders, and other professionals in the housing sector.