There’s concern within B.C.’s construction industry that U.S. tariffs would add to the cost of housing and could slow growth at a time when the country is pushing for more housing stock.
“We’re already facing very high cost pressures on new development, including interest rates and construction that has gone up in Canada 60 per cent since 2022,” says Reliance Properties president Jon Stovell. “And now another six or seven per cent from tariffs is going to make it that much harder to deliver housing.”
The developer says it’s widely understood that if the U.S. follows through with tariffs on Canadian products as planned in March, there would be “significant” impacts to construction costs.
“Early research indications are that on a project starting from scratch, 25 per cent tariffs across the vast majority of items that go into a building would increase construction cost about six or seven per cent overall,” says Stovell.
He figures it will take awhile for the costs to ripple through. For example, Stovell says, in some cases you have material like raw steel that gets shipped over the border from Canada to the U.S. then made into other smaller components there – adding costs once the supplies are sent back to Canada.
“We import a lot of gypsum for drywall, rebar, glass. All of those components would be impacted,” says the Victoria Residential Builders Association’s executive director, Casey Edge. “It’ll impact industry across the board, whatever you’re doing: New home construction, renovations.”
Construction industry experts say countermeasures from Canada would also add to the cost of housing and could erode the viability of development.
“We know close to 50 per cent of our building supplies come from the U.S. right now. So we are actively working with construction industry reps to find new markets to be able to purchase items so that they can pivot or in some cases how we can scale up local supplies,” says B.C.’s housing and municipal affairs minister, Ravi Kahlon.
The federal housing minister issued a statement to CTV News, echoing the province in saying government leaders and partners are working together to “push back as hard as we can.”
“I’ve been engaged with industry and non-market and market housing providers across the country to make sure the government can be the best partner for increasing housing affordability,” said Minister Nate Erksine-Smith. “All levels of government are united on that front and we are consulting with industry to ensure we are responding in a thoughtful way.”
Reliance Properties wants to build Victoria’s next tallest tower downtown, at the corner of Pandora Avenue and Blanshard Street.
“It’s really the point where if you don’t think you can recover those costs from the revenue of the project from selling the condominium units, in this case, or that the market won’t pay those costs then you won’t proceed,” says Stovell.
The Vancouver-based developer says the 35-storey pitch is a long way off from approval. There are no plans to abandon the vision, partly in hopes of a resolution with the country’s largest trade partner.
“I just don’t think it’s a sustainable policy for the U.S. or Canada,” says Stovell.
