Construction at a Crossroads: Tariffs, Costs, Labour & Billions in New Government Investment

Toronto, ON – September 5, 2026

Canada’s construction industry is entering a critical period.

Governments are promising to build housing and infrastructure at a pace not seen in years — but builders, developers, contractors, manufacturers and suppliers are simultaneously facing new tariffs, labour shortages, municipal fees, servicing constraints and escalating project costs.

Tariffs Hit Construction September 8

Canada’s new counter-tariffs take effect September 8, covering $27.6 billion of U.S. imports, with rates of 15%, 25% and 50%. The measures include steel and aluminum products, appliances, plastics, electronics, lighting and other products that can feed directly into construction and renovation costs.

Homebuilders are already warning that higher costs for appliances, electrical and plumbing components, flooring, lighting and other materials could work their way through subcontractors and ultimately into project costs and home prices.

For contractors dependent on American machinery, components or building products, procurement decisions made today could materially affect tomorrow’s margins.

Importers may also have an avenue for relief. Ottawa has maintained a tariff-remission process, including circumstances where necessary inputs cannot reasonably be sourced in Canada or from alternative non-U.S. suppliers.

CUSMA: The Uncertainty Is Not Over

CUSMA remains in force until 2036, but the 2026 Joint Review has placed the Canada-U.S.-Mexico trading relationship under intense scrutiny. Ottawa says the review itself is not an expiry date, but ongoing sectoral disputes — particularly involving steel, aluminum, autos and softwood lumber — continue to create uncertainty for Canadian businesses.

For construction, that uncertainty matters. Materials pricing, equipment costs, supply chains and investment decisions all depend on predictable cross-border trade.

Build Canada Homes Puts Its Headquarters In Toronto

Build Canada Homes is establishing its corporate headquarters at 1 University Avenue in Toronto, while maintaining an operational presence across the country.

The organization was launched with an initial $13 billion commitment to accelerate affordable housing, work with municipalities and developers, develop federal lands and support new approaches to homebuilding. Its growing role creates significant opportunities for developers, builders, modular manufacturers, building-material suppliers and organizations capable of delivering housing at scale.

We Want To Build — But Where Are The Water And Sewers?

One of the biggest threats to Canada’s housing targets is increasingly underground.

Municipalities are being told to approve more homes, but many simply do not have the water, wastewater and sewer capacity to service them.

More than 11% of Canada’s water and wastewater infrastructure was rated in poor or very poor condition, representing an estimated $107 billion in replacement value. Projects in several regions are already being delayed, phased or constrained because servicing capacity cannot keep pace with housing approvals.

Governments have recognized the problem. Ottawa’s $51-billion Build Communities Strong Fund is financing housing-enabling infrastructure, and funding is already flowing into water and wastewater projects across Canada.

Municipal Fees Can Make Or Break A Project

The development industry continues to warn that development charges, permit fees, changing requirements and approval delays can turn an economically viable project into one that is delayed, reduced or cancelled.

The Vancouver Regional Construction Association is calling for predictable development charges, measurable permitting standards, earlier industry consultation and better coordination between governments.

Ontario is now testing the other approach.

Mississauga is receiving up to $401.4 million in housing-enabling infrastructure funding after substantially reducing development charges. The objective is simple: lower the cost to build while funding the infrastructure required for growth.

Canada and Ontario have also announced $1 billion for municipalities that do not levy development charges, supporting roads, bridges, water systems and other infrastructure necessary for new housing.

Regional Construction Activity Is Moving

Ontario: Federal infrastructure funding of $932 million for 2026–27 is flowing through Ontario, including $183 million for Toronto and $746 million through the Association of Municipalities of Ontario.

British Columbia: Nearly $92 million has been committed toward 183 family-sized rental homes in Burnaby, including $84.5 million through the Apartment Construction Loan Program.

Alberta: Federal investments are supporting wastewater capacity expansion, including projects intended to unlock additional residential growth.

Atlantic Canada: Federal, provincial and municipal governments are investing in water, sewer and stormwater systems in communities across New Brunswick and Prince Edward Island specifically to unlock new housing construction.

At the same time, governments are increasingly embracing prefabricated, modular, mass-timber and factory-built housing as part of the effort to build faster and reduce pressure on scarce construction labour.

Labour + Materials + Tariffs = A Perfect Storm

The industry was already dealing with shortages of skilled trades, high borrowing costs, costly municipal approvals and rising material prices.

Now tariffs are adding another layer.

Newfoundland and Labrador builders described the combination of skilled-labour shortages, regulation, building-code changes and material costs as a “perfect storm.”

But there is another side to the story.

Billions Are Being Put On The Table

Ottawa has announced a $7.5-billion tariff-response package for Canadian workers and businesses, including an additional $1.5 billion through the Regional Tariff Response Initiative for SMEs affected by trade disruption.

Add to that billions being invested through:

• Build Canada Homes
• Build Communities Strong Fund
• Canada Housing Infrastructure Fund
• Apartment Construction Loan Program
• Provincial infrastructure programs
• Workforce and training initiatives
• Tariff-relief measures
• Regional development agencies

The challenge for construction companies is no longer simply knowing that government money exists.

The challenge is determining which programs apply to your company, your project, and your particular tariff or financing problem—and reaching the right government officials before opportunities are missed.

How GTA Strategies Can Help

GTA Strategies works with developers, builders, contractors, manufacturers, suppliers and construction-related businesses to navigate all three levels of government.

We do not simply look for one grant.

We look at the entire project or business, identify the government programs and decision-makers that matter, and then work with you to move the file forward.

With tariffs about to hit, billions in government investment moving into the market and construction costs continuing to climb, now is the time to determine what your business may qualify for.

Contact GTA Strategies to arrange an initial discussion.

Your project should not sit on the sidelines while government funding, procurement, and infrastructure opportunities are allocated.