Uncertainty over tariffs adds pressure to housing market

The construction industry is facing renewed challenges as uncertain tariffs on imported materials make it increasingly difficult to predict building costs.

Developers warn that if the issue is not addressed, it could quickly worsen Canada’s housing affordability crisis.

Benjamin Sternthal, a developer with Kodem, said the industry is too dependent on U.S. imports and is calling on the federal government to expand trade partnerships.

“They should have been forging new relationships five years ago during the last round of tariffs and free trade discussions with Mr. Trump,” Sternthal said.

“So right away, they should be forging new relationships with every partner country that wants to work with Canada.”

Beyond tariffs, Sternthal said lengthy municipal approval processes also drive-up costs.

“It takes us up to a year and a half to get municipal approvals. We spend north of $1 million per project to do that,” he said.

“Make the process easier, make the process more streamlined, and that $1 million we can be saving offsets costs of any tariffs, potentially.”

With construction costs rising, real estate broker Mark-André Martel said uncertainty is also affecting sellers, who are becoming more hesitant to list their properties.

“Sometimes they’re just reluctant to plan for a sale in the next week or two or a month because they don’t know what type of market they’re going to fall on,” he said.

Despite the concerns, home sales were up 40 per cent in January and February compared to the same period last year.

But Martel warned that a lack of sellers could put further strain on the market.

“There’s not a lot of new properties coming to the market. And I think the last thing that we would need is sellers not participating in the market, ultimately creating a shortage of inventory,” he said.

The uncertainty comes as Quebec and Canada continue to grapple with a worsening affordable housing crisis.