This publication was posted based on the information available at the time. Due to the uncertainty of the trade landscape, some rules may have changed since then, but the insights provided remain highly relevant for adapting to ongoing shifts in the market.
The Trump administration came out of the gate with the immediate threat of tariffs on most Canadian imports at a rate of 25%.
The Canadian government has responded with threats of retaliatory tariffs, which includes $24 billion of imported U.S. steel and aluminum.
Although that action has been delayed in the short term, the rhetoric is creating uncertainty in the real estate and construction space.
If tariffs cannot be averted, the impact will be immediate, resulting in:
Over the short term, some impacts might be mitigated by a targeted government response such as innovation incentives, reduction of reporting requirements, reduction in development cost charges from local governments, investment in infrastructure, and market pressures around insufficient housing.
Until we have more clarity, there are steps businesses can take to increase their resilience:
- Assess and identify dependency on construction materials.
- Analyze current and future projects in the pipeline and financial impact.
- Lock in contracts with steel.
- Negotiate fixed-price agreements where possible.
- Explore domestic suppliers looking to reduce their export exposure.
- Consider alternative international suppliers from tariff-exempt/reduced tariff regions (e.g., Europe or Asia).
- Scenario plan cost projections to reflect impact of the range of anticipated material price increases.
- Include contingency budgets to absorb unexpected cost spikes.
- Review opportunities to increase flexibility in procurement.
- Reassess project timelines and consider phasing projects to allow for supply uncertainty and delays.
- Engage with lenders to secure flexible credit lines or renegotiable debt terms to allow for potential cost escalations or project delays.
- Where possible, adjust pricing models to reflect higher construction costs while remaining competitive in the market.
- Consider offering value-added features in projects to offset price increases to buyers and investors.
Adaptability and strategic rapid response will be key to navigating disruption and coming out ahead. It’s important to monitor tariff changes, trade negotiations, and potential subsidies or innovation and tax credits.
If you haven’t done so already, connect with your industry associations to understand how they are lobbying for support.
Finally, reach out to your trusted business advisors to ensure that you have support invested in the health of your business.
Discover more insights regarding the proposed tariffs on our Tariff readiness page. Or reach out to one of our Real Estate & Construction team members.
The information in this publication is current as of February 27, 2025.
This publication has been carefully prepared, but it has been written in general terms and should be seen as broad guidance only. The publication cannot be relied upon to cover specific situations and you should not act, or refrain from acting, upon the information contained therein without obtaining specific professional advice. Please contact BDO Canada LLP to discuss these matters in the context of your particular circumstances. BDO Canada LLP, its partners, employees and agents do not accept or assume any liability or duty of care for any loss arising from any action taken or not taken by anyone in reliance on the information in this publication or for any decision based on it.