Navigating Industry Challenges: CUSMA, Market Shifts, and New Opportunities for the Construction Industry

Toronto, ON – August 18, 2026

The Canadian construction sector is facing rapid change, shaped by evolving trade negotiations, shifting investment patterns, and significant policy reforms. Below is an overview of the key developments impacting our industry.

CUSMA Negotiations: Implications for Construction

Ongoing CUSMA (Canada–United States–Mexico Agreement) negotiations are influencing supply chains, regulatory environments, and cross-border investment. The construction industry must stay alert to potential changes in tariffs, procurement rules, and labour mobility, which could affect project costs and timelines. Strategic planning and advocacy are essential to mitigate risks and leverage new opportunities as the agreement evolves.

Foreign Buyers and Investors Pull Out

Recent data shows a marked decline in foreign investment in North American real estate. In the U.S., foreign purchases of existing homes dropped 14% in volume and 19% in value, with similar trends seen in Canada. The retreat of investors—especially in the condo market—has led to project cancellations and a pivot toward purpose-built rentals. This shift is reshaping demand, financing, and the types of projects moving forward.

New Build Canada Homes (BCH) Chair: Evan Siddall

Evan Siddall has been appointed as the inaugural Chair of Build Canada Homes, the new federal agency focused on affordable housing. Siddall brings extensive experience as former CEO of Canada Mortgage and Housing Corporation (CMHC), Vice-Chair of BMO Capital Markets, and special adviser to the Bank of Canada. He is recognized for developing the National Housing Strategy and championing innovative financing and construction methods. Under his leadership, BCH has already committed to nearly 17,000 units, with over 1,900 homes under construction.

Home Buying Plummeting & Market Dynamics

Homeownership construction is at its lowest in years, with condo starts falling below 50,000 for the first time since 2009. Developers are pivoting to rental projects due to higher interest rates, construction costs, and reduced investor presales. The share of homes built for ownership has dropped from over 70% to about 45%. This trend could lead to future shortages of ownership units and renewed upward pressure on prices.

Government Policies and Market Affordability

Policy decisions at all levels have contributed to Canada’s affordability crisis. Restrictive land use, lengthy approvals, and high development charges have slowed new supply and driven up costs. Critics argue that current policies are undermining the Canadian dream of homeownership, especially for young families and newcomers.

Major Projects: Toronto’s $2.7 Billion Rental Initiative

The federal government has announced $2.7 billion for 18 new rental developments in Toronto, aiming to deliver over 5,600 rental homes, including 1,800 deeply affordable or rent-controlled units. Funding is split between non-profit projects on city land and private-sector developments, with a focus on accelerating stalled projects and increasing supply.

Modular Home Construction: Speed and Flexibility

Modular construction is gaining traction as a solution to housing shortages. Projects in Nova Scotia and Ontario demonstrate that modular methods can reduce build times and costs, with CSA-certified homes now available for year-round occupancy. Prefabricated modules are also being used in Vancouver to create flexible, customizable homes.

Unlocking Church Land for Housing

Faith-based organizations are Canada’s second-largest landowners, and initiatives are underway to redevelop underused church properties for affordable housing. Partnerships among congregations, developers, and municipalities are key to unlocking this potential, with pilot projects already underway in cities like Winnipeg and Edmonton.L

Canadians Spending Up to 50% of Income on Housing

A recent survey found that nearly half of Canadians renewing mortgages now spend 50% or more of their household budget on housing. This is well above the recommended 30% threshold, leaving little room for other expenses and increasing financial vulnerability.

Regional News & New Government Proposals

• Atlantic Canada: Massive investment is needed to retrofit existing buildings for net-zero targets, with $240 billion required by 2050.
• Prairies: Calgary’s secondary suite program has doubled legal rental units, while Regina faces calls for more social housing.
• British Columbia: Building permits are down, but purpose-built rentals and modular construction are helping sustain activity. The province is also working with Ottawa to reduce development charges and convert unsold condos into affordable homes.
• Ontario: New proposals include incentives for greenfield and infill development, and a focus on diversifying housing types to match buyer preferences.

How GTA Strategies Can Help

GTA Strategies is positioned to assist the construction industry and stakeholder.