CaDCR staff writer
Construction costs continued to rise across Canada in the second quarter of 2025, with volatility in material pricing and availability fuelled by ongoing Canada-U.S. tariff tensions, according to the latest data from Statistics Canada.
The federal agency reports that residential building construction costs rose 1.0% between April and June, following a 0.9% increase in the first quarter. Non-residential construction costs saw a steeper increase of 1.6% in Q2, up from 1.0% in the previous quarter.
On a year-over-year basis, residential construction costs in the 15-Census Metropolitan Area (CMA) composite climbed 3.7%, while non-residential costs were up 4.0%.
Industry participants surveyed by Statistics Canada cited uncertainty surrounding cross-border tariffs and related countermeasures as a key factor disrupting procurement, delaying project starts, and creating broader cost instability. These delays—compounded by persistent skilled labour shortages—continued to drive up labour rates and intensify competition for available work, placing additional pressure on contractor margins.
Material costs remain a central concern. Tariffs have pushed up prices on a range of components, particularly those involving metal products. That said, subdued construction activity in major markets like Toronto and Vancouver helped ease aggregate-level price growth.
In Ontario, the pace of residential construction cost growth lagged behind most other regions. Toronto posted the lowest increase among major cities at just 0.2% for the quarter, while London experienced a 2.5% increase—one of the highest nationwide.
Residential cost increases were led by the plumbing division (+3.7%), followed by HVAC (+3.0%), utilities (+2.9%), and structural steel framing (+2.7%). Many components within these divisions were impacted by Canada’s 25% countermeasure tariffs implemented in mid-March. Meanwhile, some divisions—such as wood, plastic and composites (-0.2%) and conveying equipment (-0.7%)—saw modest price declines.
Québec reported the sharpest rise in both residential (+3.4%) and non-residential (+3.4%) construction costs in Q2, driven primarily by higher labour rates. Montréal and London followed closely in the non-residential sector with quarterly increases of 2.6% and 2.5% respectively.
Nationally, non-residential construction costs rose across all divisions, with structural steel framing (+3.4%) and plumbing (+2.5%) posting the largest gains. Price pressures were most acute in regions where metal-based materials are heavily used, particularly in Quebec and the Prairie provinces.
As the industry navigates economic uncertainty, StatsCan’s report highlights the need for careful cost planning and contract structuring—especially in regions like Ontario, where project timelines and competitiveness are increasingly shaped by external factors like tariffs and labour availability.
