‘Tit-for-tat’ tariffs rising costs for homes on both sides of the border
By Daily Commercial News
Sept. 22, 2026
A new report prepared recently by the Residential Construction Council of Ontario (RESCON) shows the constant back and forth tariffs between Canada and the U.S. is raising the cost of new homes significantly.
Counter-tariffs imposed Sept. 8 will add $9,000 to $14,000 to the cost of a typical Ontario single-detached home and $18,000 to $28,000 to a mid-rise unit. That’s in addition to the $15,000 to $25,000 load that homes were already carrying from measures imposed in March 2025, a release notes.
“This should not, in any way, be construed as a criticism of the Canadian government’s decision to respond to the U.S. with counter-tariffs,” explains RESCON president Richard Lyall in a statement. “Faced with substantial U.S. tariffs, Canada had little choice but to act, as no sovereign nation can simply stand aside while key industries are targeted with punitive trade measures.
“However, this is not a good situation for the homebuilding industry. Tariffs inflict damage on both economies. They are not prosperity measures and will make building homes more expensive in both Canada and the U.S.”
Costs for structural steel and rebar to wiring and vinyl products, radiators and cabinet hardware, carpets and heat pumps will all go up.
The release states modelling by the Association of Municipalities of Ontario and Oxford Economics put the Ontario hit at $2.68 billion of GDP and 14,000 construction jobs in 2026 – before the Sept. 8 counter-tariffs were implemented. A preliminary read suggests 2027 housing starts in Ontario could run 8,000 to 12,000 units below the current CMHC baseline if no residential remission is granted.
Lyall warns builders will not be able to absorb the increases without passing the costs on to homebuyers and renters. This will further worsen affordability in both the U.S. and Canada.
“Both Canada and the U.S. find themselves struggling with severe housing affordability challenges, the last thing we need is an escalating tariff war that drives up the cost of building homes,” adds Lyall. “Yet that is precisely where we find ourselves today. The trade war between the two closest economic partners in the world will only make the housing crisis worse.”
A report done by Oxford Economics for the Canadian American Business Council underscores the importance of the longstanding commercial relationship between Canada and the U.S. A complete breakdown of the U.S.-Mexico-Canada Agreement (USMCA) could result in cumulative economic losses reaching (U.S.) $1.4 trillion in the U.S. and (Cdn.) $523 billion in Canada. By contrast, an improved agreement could add (U.S.) $432 billion to American GDP and (Cdn.) $253 billion to Canadian GDP over the next decade while supporting tens of thousands of additional jobs on both sides of the border.
“Imposing tariffs has created a problem where none existed,” says Lyall. “It’s akin to shooting yourself in the foot. Tariffs are not the answer. And they only add to our housing supply and affordability crisis. You don’t build more homes by imposing tariffs and hiking prices.”