Today’s late edition of Monday Morning Briefing has been waiting to share the good news (at least for now) that President Trump will be holding off on the tariffs for at least 30 days, after he and Prime Minister Trudeau spoke on the phone today, and will be working together on a Canada-U.S. Joint Strike Force, that will be tasked with combating organized crime and money laundering.
On February 1, President Trump implemented a 25% tariff on all imported Canadian goods and 10% tariff on Canadian energy resources this weekend, and our federal and provincial governments across the country are swiftly responding with their own countermeasures.
Prime Minister Justin Trudeau delivered a rousing speech on Saturday, addressing Canadians and their concerns about the tariffs and outlining the government’s swift countermeasures against the U.S. but he also spoke to the American people about the negative impact they will bare as a result of Trump’s decision and the countermeasures Canada will employ. Yesterday, in a news release from the Department of Finance Canada, it was announced that “…the Government of Canada is moving forward with 25 per cent tariffs on $155 billion worth of goods in response to the unjustified and unreasonable tariffs imposed by the United States (U.S.) on Canadian goods.”
- The Canadian-imposed tariffs will be implemented in two stages:
Effective February 4, tariffs will be applied to $30B in goods imported from the U.S., - An additional list of goods worth $125B will be announced later this month, after a 21-day public consultation period.
While the surge of national pride is inspiring, there is real concern about the impact this will have on the Canadian economy, particularly within the homebuilding industry.
How Will This Affect the Homebuilding Sector?
HAVAN is part of a three-tiered association with representation and advocacy at the provincial and federal levels. At the federal level, CHBA has been actively addressing the tariff concerns since late 2024, with CHBA CEO Kevin Lee testifying at the House of Commons Standing Committee on International Trade as well as meeting with the Bank of Canada, and other Ministries’ officials on the very negative impacts of tariffs (both the U.S.-imposed and Canada’s retaliatory measures) on residential construction.
- In CHBA’s report Impact of Trump Tariffs on Canadian Residential Construction Sector, four key areas of concern were outlined:
Impact on Economy: Economic slowdowns and uncertainty typically lead to reduced consumer confidence and spending, which in turn slows housing starts and renovation activities. - Supply Chain and Construction Costs: Tariffs mean higher prices for the cost of goods. Canada imports some $3.5B in glass and glass products, $3.1B in major appliances, $2.2B in hardware, about $1B in ceramic tile and products, just to name a few—all of these would go up in price, though only appliances are being targeted by Canada so far. The impact on the lumber industry is also of concern – reduced exports could mean mills will reduce capacity or could shut down if the tariffs remain in place for years, so looking to support Canada’s lumber industry will be important. As well, BC softwood lumber will be facing the 25% increase in addition to the 14.4% duty, making it a less attractive option to U.S. buyers.
- Currency Effects: A weakening trade balance could lead to a depreciation of the Canadian dollar against the U.S. dollar.
- Inflationary Pressures: If tariffs drive inflation, the housing industry could face additional pressure from interest rate adjustments by the Bank of Canada, potentially affecting mortgage rates and financing costs.
CHBA will remain engaged with the government to ensure all considerations regarding the industry, housing supply and affordability are considered, with an emphasis on avoiding tariffs on construction products and materials. The government is stating it will provide industry and worker supports, which may indeed be needed for residential construction, depending on how things unfold.
Provincial Perspective
From the provincial perspective, Premier Eby also announced immediate countermeasures to protect B.C. goods and workers, including the establishment of a new cabinet committee tasked with responding to the new tariffs, chaired by Ravi Kahlon, Minister of Housing and Municipal Affairs.
Eby has also said the Province will be looking at strategies to strengthen B.C.’s position by diversifying trade partners and investing in its own economic resilience, announcing they have identified 10 private-sector projects to expedite — including mines, renewable energy and natural gas — valued at $20 billion. Currently, an estimated 54 per cent of B.C.’s exports go to the U.S., making it British Columbia’s biggest trading partner.
What’s Next?
Although it seems Canada’s countermeasures have caught the attention of President Trump, which opened an opportunity for the two leaders to agree to a 30-day delay, there is still a looming uncertainty surrounding the future of these tariffs, which has sparked an important conversation about the need for Canada (and BC) to take an introspective look at its own plans to secure future economic resilience and growth.
The real estate sector is one of the largest contributors to Canada’s GDP and it is important to ensure it continues moving forward. This industry creates jobs, economic growth, resilience, personal wealth (and discretionary spending), taxation base, etc. It is a good time to remind all levels of government that a healthy housing industry is important for Canada and it should continue to support initiatives that facilitate its growth.
From a local perspective, municipal governments should be doing more to support this struggling housing industry by reducing municipal (and Metro) development taxes and fees, and bureaucratic red tape, which would help spur homebuilding and make housing more affordable, regardless if the tariffs continue or not.
HAVAN continues to work with CHBA BC and CHBA to advocate for all levels of government to work together to address the challenges of the housing industry including zoning restrictions, density limits, and NIMBYism.
Looking to stay up-to-date on Metro Vancouver’s residential housing industry? Sign up for Wendy’s weekly Monday Morning Briefing and other HAVAN emails here.
QUICK BITES …
- The impact of Trump’s increased tariffs on Canada, and Canada’s retaliation is discussed by Rodrigue Gilbert, president of the Canadian Construction Association on Bloomberg News.
- BIV reports Metro Vancouver is considering waiving development cost charges (DCCs) for below-market rental units that are built by private developers and transferred to non-profits upon completion.
- On the other end of the housing spectrum, the crown prince of Dubai has listed his four penthouse units at the Fairmont Pacific Rim condo tower in downtown Vancouver for $44.5 million – down from the $54 million purchase price in 2013 as reported in the Vancouver Sun.
- Curious about how parking impacts development costs? STOREYS takes a deep dive into the challenges and trade-offs, featuring insights from Curtis Neeser of Beedie and Brad Jones of Wesgroup Properties—two industry leaders with projects both near transit and beyond. If you think you know the true cost and challenges of parking, think again. Read on.
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LEARN THE BASICS OF URBAN PLANNING with Eric Aderneck: ONE-DAY LIVE ONLINE CLASS, February 8, Saturday, 9:30 am to 2:45 pm PST: www.eventbrite.ca/e/learn-the-basics-of-urban-planning-one-day-live-online-class-tickets-692147099607
