Ontario’s homebuilding industry is bracing for a potential surge in costs as U.S. President Donald Trump moves ahead with new tariffs on Canadian imports, including a 25% tariff on steel and aluminum starting March 12. Industry experts warn that these tariffs could drive up the price of new homes at a time when Ontario is already struggling to meet its housing targets.
The province needs to build 1.5 million homes by 2031 to meet demand, yet construction is falling far short of that goal. Only 75,000 new homes were built last year, well below the 125,000 required annually, according to Scott Andison, CEO of the Ontario Homebuilders’ Association (OHBA). With high construction costs already limiting affordability, tariffs could make new housing even more expensive and force some builders out of the industry.
Andison explained that if Canadian steel and aluminum producers lose access to U.S. markets, they may raise domestic prices to offset their losses. That would directly impact home construction costs, as materials like rebar, beams, and other essential components become more expensive.
While it’s still unclear how much new home prices will rise due to tariffs, the broader economic effects are also a concern. Tariffs could slow economic growth or even trigger a recession, reducing homebuyer demand at a time when affordability is already a challenge, Andison noted.
There’s also uncertainty over whether Canada will respond with counter-tariffs on U.S. imports like lumber, gypsum, or cement, which could further increase building material costs. If a trade war escalates, Canadian homebuyers could face even higher prices.
Beyond tariffs, government fees and taxes currently make up 30-33% of a new home’s cost, Andison added. He urged the Ontario government to consider waiving some tax and fee structures to counteract rising costs and keep home construction viable.
With Ontario already struggling to hit its housing targets, builders hope negotiations between Canadian officials and the Trump administration will prevent tariffs from taking full effect. However, if the tariffs proceed as planned, the cost of new homes in Ontario is almost certain to rise, adding another barrier for prospective homebuyers in an already expensive market.