It’s no secret that Canada’s homebuilding industry has seen better days. As we closed out 2024, factors such as labour shortages, high interest rates, and climbing development fees had resulted in the pause or cancellation of many new housing projects – and that was before tariffs shifted from talking point to stark reality. Now, the development industry's worry is that an ongoing trade war with the United States (US) could impact everything from consumer confidence to the pace of new home construction.
Canadian developers are preparing for the full impact of the 25% US tariffs on steel and aluminium products coming from the great white north, expecting higher material costs, increased supply chain disruptions, and greater economic uncertainty. In short, tariffs will result in higher home prices for Canadians.
And, while the heightening trade war has resulted in a renewed sense of patriotism across Canada, with a resounding message to buy Canadian-made products, it has led us to ask; is it possible to build an all-Canadian home?
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An Intertwined Supply Chain
According to the Residential Construction Council of Ontario (RESCON), the economic uncertainty created by tariffs will almost certainly lead to a slowdown in new housing construction in both countries, due to intertwined supply chains. The US imports large amounts of steel, aluminum, lumber, cement, and gypsum for use in construction, while Canada exported 6.56 million tons of steel to the US in 2024, and accounted for 56% of aluminum imports to the US in 2023.
“Conversely, we rely on materials imported from the US, like plywood, glass, metal fittings, light fixtures, ceramics, electrical parts, and plumbing and mechanical components,” says RESCON president Richard Lyall. Reciprocal tariffs will raise prices for those goods and supply chains will be disrupted as builders look for alternative sources for materials, he says.
Kevin Lee, CEO of the Canadian Home Builders' Association (CHBA) says that free trade has worked well for so long, that it would be difficult to build an all-Canadian house. “The free flow of goods throughout North America (and with the rest of the world) has maintained a low priority on domestic sourcing relative to what is most efficient for industry and the downstream consumer,” says Lee. “The free-trade world has made it logical to produce some things domestically but not bother producing others where it makes more sense to import.”
Currently, Canada does have the core resources central to building new homes. “Canada has strengths in certain areas, like lumber, concrete, insulation, drywall, steel and aluminum, but with such an integrated trade system with the US, in many cases products move north/south rather than across the country,” says Lee. “There is also specialization. For example, with multi-national companies in steel, certain US factories make certain steel products and ship north to Canada, while Canadian steel manufacturers make other steel products and ship south. Retooling all products into one factory can be expensive and ultimately, not make sense.”
It comes down to what makes the most economic sense. “In the longer term, adjusting production systems and shipping east-west may be part of the solution, but a more expensive one than free trade without tariffs,” says Lee. “There are many other steel producing countries that could be used to source products if necessary."
Mostly Canadian-Made
Canada does maintain a healthy supply of construction resources, including brick, concrete, lumber, steel, and human labour. “In general, 100% of the direct employment is Canadian, and over 90% of the materials used in home construction in the Greater Toronto Area (GTA) is sourced from within Canada,” says Justin Sherwood, Senior Vice President of Communications at the Building Industry and Land Development Association (BILD). “Depending on the housing type (multi-family vs single family), it may be technically possible to build a 100% Canadian-sourced home, but it would require some very deliberate design, sourcing, and material choices that may not be practical or feasible. HVAC, electrical components, appliances, and finishes are some areas where it is challenging.”
Dave Henderson, RESCON's senior manager of technical services, says that many people don’t realize how many bits and pieces need to come together to build, finish, and furnish a house. “Items like plumbing faucets and fixtures as well as furnaces come to mind as products we can source from Canadian manufacturers, but to get them in the volume we potentially need (if the industry were to pick up again) would be problematic,” says Henderson. “Even glass for windows comes from China in volume. Tile for flooring comes from Italy, Spain, India, or the US.”
Paul De Berardis, Director of Building Science and Innovation at RESCON, points to the smaller components needed to make up a house that are not necessarily made in Canada. “Things like door components (hinges and handles), railing components (pickets), kitchen hardware, and plumbing components,” he explains. “Also, when it comes to the electrical system, panel, breakers, plugs/switches, and electrical fixtures – a lot of these things are made overseas. You could probably get a house to about 80-90% sourced in Canada, but it would not be a value-oriented build.”
Appliances in particular are difficult to source in Canada – something all the experts we interviewed noted. “One example of specific products that would be difficult to source within Canada are large home appliances, of which there is limited domestic manufacturing capacity,” says CHBA's Lee. “Many of these appliances come from the US, and while Canada does also source appliances from Asia and Europe, capacity for these regions to provide more, in lieu of US imports, may be difficult in the short term.”
The Details
Just how "all-Canadian" a home can get depends on how deep you want to go in the detail department of the supply chain, says Henderson. “For example, the excavator used to dig the hole for the foundation may be made in Japan or Korea, Canada or the US; the diesel for it may be refined in the US,” he says. “I would say we can supply our own high-level stuff like lumber, steel, brick, and siding. But it’s going to get more and more complicated as you drive down into all the components.”
A through-and-through Canadian-made home requires digging deep to trace supply-side origins – literally down to the nuts and bolts.
“For example, the plastic plumbing pipes may be manufactured in Canada, but the fittings like elbows and tees, or the crimp rings or fastening clips, may come from the US or China,” says Henderson. “The crimping tool used to put it all together likely comes from China. Another example are nails and screws. Simple, common straight nails may be manufactured in Canada, but nails and fasteners specific to a certain tool manufacturer may not (Paslode, for example, uses their own proprietary nail clips). Then, of course, there are the tool manufacturers: DeWalt, Makita, and Milwaukee are all US brands. They have offices in Canada, but I am pretty confident their tools are not made in either Canada or the US. DeWalt, for example, has manufacturing plants in Mexico, Brazil, the United Kingdom, and China.”
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In Practise
Before the trade war became a reality, Highstreet Village, a 12-acre residential community in the Fraser Valley, British Columbia (BC) became one of the largest majority Canadian-made developments in the country coming in at 80% Canadian-made. By prioritizing Canadian-made materials, domestic trades, and local suppliers, the project has mitigated exposure to external market volatility, says developer AB Wall — an approach that will become increasingly critical as tariffs reshape the industry.
“As local developers based in and experienced in the Fraser Valley and Lower Mainland as a whole, we have deep links to the local construction community,” says Wall. “In addition to delivering high quality housing at the Highstreet Village Apartments and Townhouse development, we also sought to support the local economy and generate jobs for tradespeople; our general contractor, J Floris Construction, is based in the Fraser Valley and 90% of the trades are local individuals and contractors based in the Lower Mainland and Fraser Valley.”
For the material components, 80% of the products and materials were sourced from local producers. “For example, 95%+ of the wood based products installed or used for building the Highstreet Village Apartments and Townhomes are Canadian made and manufactured, with minor items such as lumber hardware, straps, and the resin used in the OSB Lumber coming from the US,” says Wall. “This includes doors and windows that were all manufactured in the Lower Mainland."
Wall says that the most difficult items to source directly – ones they don’t manufacture locally or at all on the west coast of Canada – are primarily electrical equipment, appliances, and interior finishing items like carpet tile, vinyl plank or laminate flooring, plus some cabinetry materials, countertops, and the resin and plastics that are found in piping. “While we may not be able to supply some of those raw materials from Canadian sources, we purchase all these through Canadian suppliers and trades,” he says. “For example, our plumbers are using Riobel fixtures (eastern Canada), Acrytec Tubs (Fraser Valley), IPEX piping (Abbotsford). There are plenty of local options as well, like GlassWorld for their mirrors and bathroom hardware, Abbyglass for glazing, and Richmond Building Supplies for doors.”
In Canada, Wall says appliances, electrical, and mechanical equipment remain difficult to source locally. “We used Schinder for electrical switch gears, which is one of the few manufacturers, and Samsung for appliances, along with some of the other smaller electrical items that come from overseas. But, again, all the material coming from overseas comes direct to Canadian distribution centres supporting Canadian jobs, such as distributor Trail Appliances.”
Ultimately, relying on hyperlocal made it easier to monitor costs, with shorter lead times and minimal transportation costs, says Wall. “Specifically, material items such as lumber, concrete and rebar, which made up over 35% of the apartment construction costs, were sourced locally, given the abundance of businesses in the Lower Mainland and Fraser Valley,” says Wall. “Some major items, like electrical switch gears, had longer lead times and there were fewer alternatives for us to choose from. By supporting local trades people, we can also be more price conscious, as the tradespeople want to work locally and commute less. With Highstreet Village being in Abbotsford, it afforded the opportunity to work locally in the community and reduce shipping and travel times for suppliers.”
Possible, Not Probable
The inevitable (and ugly) reality is that tariffs will certainly increase the cost of construction. "It will be a cost issue, not an availability issue," says Lee. "US goods will still be available, just more expensive, and even if Canada moves to sourcing from other countries, they will likely be pricier. These increased costs will certainly make it more expensive to build homes."
Industry experts point to the greater impact of tariffs on the economy and consumer confidence. “Our biggest concern remains the impact of the present economic uncertainty on consumer confidence in an already slow GTA new housing market,” says BILD's Sherwood. Tariffs may also lead to layoffs and unemployment, hindering potential would-be buyers' eligibility to enter the market.
The overall effect of tariffs on the economy and in turn on consumers confidence will "no doubt" lead to fewer home sales and housing starts, adds CHBA's Lee. "Government policy to address all other aspects of housing affordability and supply will therefore be key," he says. "From lowering interest rates, to addressing high municipal development taxes, to fixing GST on new housing, and more, there is a lot that can be done that will both be beneficial now and still needed once this trade war hopefully comes to an end."
Despite the current trade war with the US, however, it's not necessary to fully turn inwards to source materials, Lee maintains. “There are many building product categories where Canada manufacturing already supplies or could adjust to supply the full national home building industry,” says Lee. “However, there are other nations from which Canada also gets its imports. In fact, for many specific building materials, the US is not the top source of imports into Canada.”
So, while buying Canadian products is important, Lee says Canada has the opportunity to strengthen trade amongst a diverse set of partners, many with whom we already have trade agreements. “Trade agreements work to the strengths of different countries and allow the most appropriate products at the best prices to support lower prices for consumers,” he says. “If it is necessary to go this route, it will take some time to adjust supply chains, and goods will likely increase in cost, but it will still make more sense than trying to build an ‘only Canadian’ home.”
That's not to say building such a home would be an impossible feat. “The short answer is it may be possible to build a largely Canadian-sourced house if you really try hard, but you would have to make concessions based on fewer product options, and it definitely won’t be the most economical,” says RESCON's De Berardis. So, we likely won’t see a lineup of developers vying to make the most all-Canadian home any time soon.
“Small custom builders could conceivably try it as a marketing niche, but I have a hard time seeing someone like Mattamy or other large-volume builders trying to do it,” adds RESCON's Henderson. “If I had to venture a guess, I would say the simpler the structure, the easier it would be to build it from 100% Canadian products. The more complex the structure, I expect it would become increasingly difficult.”
So, it’s possible – say, for something like a backyard garden suite – to build an all-Canadian home, but it's also not very probable.
