In Q3 2024, Canada's construction material costs experienced a modest decline, decreasing by 0.5 percent quarter-over-quarter. This indicates a potential stabilization in material costs after a period of volatility. This marginal decrease offers a small respite for stakeholders, though costs remain elevated compared to pre-pandemic levels.

Notably, the fluctuations in material costs were less pronounced this quarter, likely due to stabilizing global commodity markets. For instance, copper pipes and tubes, which had surged by 11.7 percent in Q2 2024, recorded a more tempered increase of 4.0 percent in Q3 2024. Similarly, copper cable costs shifted from an 8.4 percent rise in the previous quarter to a 2.9 percent decrease in Q3 2024. Other materials such as steel pipes and tubes (-6.8 percent), porcelain floor tiles (-3.0 percent) and rebar (-4.4 percent) also saw price reductions. This reduced volatility suggests a potential easing of supply chain disruptions and a more balanced supply-demand dynamic in the market. Concrete-related materials and aggregates led the gains. These increases, though present, were far less pronounced than Q2 2024’s highs, signaling a steadier cost environment.

Looking ahead, President-elect Donald Trump has announced plans to enforce a 25 percent tariff on all Canadian imports into the US, effective as early as 20 January 2025. The Canadian Chamber of Commerce warns that such tariffs could shrink Canada's GDP by nearly 2.6 percent, costing Canadians approximately CA$1,900 per person annually (Source). These policies threaten to disrupt the deeply integrated supply chains between the two nations, particularly in the construction sector, which relies heavily on cross-border trade for materials such as softwood lumber, steel, aluminum and glass. If the proposed tariffs are implemented, the costs of construction materials and components procured from the US may increase. With costs already high in Canada, contractors may be less capable of absorbing these changes. As a result, costs could likely pass through to the clients, potentially causing project delays and cost overruns.

Given these developments, stakeholders in the construction industry should monitor policy changes and consider proactive measures. This includes identifying materials sourced from tariff-imposing countries, supplier diversification and engaging early in procurement to mitigate potential cost escalations or supply chain disruptions.