Canadian Design and Construction Report staff writer
Construction costs in major Canadian cities continued their upward march in the first quarter of 2025, fuelled by vigorous housing demand and significant government infrastructure spending, according to the latest Quarterly Cost Report from Rider Levett Bucknall (RLB), an international property and construction consultancy.
While costs rise, construction activity indicated by tower cranes shows divergence, with Toronto seeing an increase while Calgary’s count remains stable.
The RLB report, with data current to mid-first-quarter 2025, reveals that Calgary experienced a 5.90% rise in its comparative cost index between January 2024 and January 2025, while Toronto saw a 5.26% increase over the same period. Quarterly cost growth also continued, with Calgary’s index rising 1.14% and Toronto’s increasing 1.28% from the end of 2024 into early 2025.
RLB’s associated Crane Index, also released this month, provides a snapshot of construction activity levels.
Toronto saw an increase in its crane count, suggesting a potential rise in project starts or ongoing large-scale developments. Conversely, Calgary’s crane count held steady compared to the previous count, indicating a stable but sustained level of major construction activity.
Despite potential economic headwinds, including ongoing trade discussions with the United States, the report indicates the Ontario construction market is thriving.
RLB says major projects including “electric battery factories, the Gordie Howe Bridge, and the $15.7 billion GO Expansion project” are underway or planned in 2025.
Toronto’s record $59.6 billion capital budget, allocating nearly $10 billion specifically for housing construction, underscores the city’s push to address housing shortages and infrastructure needs. The increase in Toronto’s crane count aligns with this significant planned investment.
Q1-2025-QCR (1)Meanwhile, the report highlights Alberta’s strong population growth as a key support for residential construction.
“Housing starts increased by 3.4% month-over-month in Q1 2025, reaching an annualized rate of 45,991,” the report details, noting a 9.7% year-over-year increase. Calgary remains a national leader in residential development, issuing over 18,000 permits in 2024 and boasting higher housing starts per capita than other major cities, the report says.
Provincial infrastructure spending further stimulates the sector. The RLB report cites the Alberta government’s work on “53 health facility projects” and a massive “$8.6 billion commitment to build new schools” as key drivers of activity in 2024 and beyond.
The report provides detailed indicative costs for various building types (in Canadian dollars per square foot). Prime office space construction ranges from $285-$430 in Calgary and $305-$495 in Toronto. Multi-family residential units cost approximately $210-$295 in Calgary and $265-$335 in Toronto. Building a new university facility could range from $950-$700 in Calgary to $630-$985 in Toronto.
While construction costs continue to rise, Paul Brussow, president of RLB North America, expressed confidence in the sector’s ability to navigate challenges.
“I am confident in the industry’s resiliency; challenges will arise, and we will adapt,” Brussow said in a Monday (April 7) statement, with comments applicable to the broader North American market.
The combination of high demand, significant public investment, and varying activity levels reflected in the crane counts suggests Canadian construction, particularly in Toronto and Calgary, faces a dynamic and costly environment in 2025.
