The Independent Contractors and Business Association estimates Canadian counter tariffs could add eight to 10 per cent to construction costs at a time that the industry is already in a fragile state
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Companies in B.C.’s construction sector are adding up the potential costs of counter-tariffs in the Canada-U.S. trade dispute, wondering how many clients will have to put the brakes on projects.
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Canada on Tuesday released its dollar-for-dollar schedule of counter-tariffs due to take effect Sept. 8 in response to U.S. President Donald Trump’s sweeping Section 338 tariffs on some $28 billion of Canadian exports.
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The Independent Contractors and Business Association estimates the schedule, which includes 400 lines that hit steel, aluminum and wood products used in building materials, have the potential to add eight to 10 per cent to the cost of construction. Increases are “obviously going to affect the desire for people to even do projects,” said John Ramos, owner of B.C. firm DBD Westcoast Construction.
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Ramos said his company’s contracts include a clause warning clients they won’t be able to accommodate cost escalations over three per cent, so “if it goes beyond a reasonable increase, we’re going to have to pass that on to the client.”
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“Clients who are waiting for permits or designing, they may just put the brakes on the projects as a whole,” he added.
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The counter-tariff schedule, which stretches to 18 pages on the Finance Department website, includes 400 items that go into construction inputs like structural steel, bolts and fasteners, aluminum window frames, light fixtures and laminated veneer lumber.
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Ottawa’s intent was to surgically target tariffs on items where Canadian consumers and businesses have alternatives, but when it comes to steel and aluminum, alternatives aren’t easily interchangeable, according to Jordan Bateman, vice-president of communication and advocacy for the Independent Contractors and Business Association.
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“We’ve spent decades building this very integrated supply chain network with the United States,” Bateman said. “Now we’ve got to completely rebuild it as quickly as possible and find different sources.”
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Some of the alternatives won’t be Canadian, Bateman added, so “it’s going to take time, it’s going to take a lot of paperwork.”
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Jeannine Martin, president of the Vancouver Regional Construction Association, said the construction sector is a net importer of materials and the new tariffs will be added to existing levies on top of other cost increases such as the addition of the PST to professional services due to kick in in October.
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“The increased costs from tariffs is going to negatively impact an already fragile situation,” Martin said in an email.
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Bateman said that the trade war is happening at a time when the economy was already struggling “and where certainly building costs were already much higher than anyone’s comfortable with.”
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He added that the tariff factor is something municipalities need to take into account as B.C. enters its municipal election cycle, with a lot of candidates promising needed infrastructure projects.
