Tariff tensions threaten Canada’s construction market

In latest months, giant Canadian development firms have carried out extra strongly within the inventory market than their American counterparts, however contractors in each nations face uncertainty and fallout from President Donald Trump’s commerce insurance policies. 

Among the many levies that the U.S. has imposed on Canada — and which are nonetheless in impact — are a 25% tax on metal and aluminum issued on March 12 and a ten% baseline reciprocal tariff issued on April 5, in accordance with Provide Chain Dive. Canada, for its half, has responded with its personal retaliatory tariffs, most just lately on April 9 with a 25% tax on U.S.-made car imports. 

The commerce tensions mark a flip away from the nations’ traditionally neighborly relationship, personified by projects such as the Gordie Howe Bridge between Windsor, Ontario, and Detroit.

For the reason that election, the worth of shares for Canadian engineering firms WSP and Stantec “dramatically outperformed U.S. friends” like AECOM, Bowman Consulting Group, Fluor, Jacobs, KBR, NV5 International and Parsons, which noticed their shares hunch throughout that interval, in accordance with a March 23 evaluation that Milwaukee-based monetary providers agency Baird shared with Building Dive. 

The explanations for that decline are complicated, nonetheless, in accordance with Baird Senior Analysis Analyst Andrew Wittmann. The shareholder bases on the Canadian corporations are way more steady since an enormous portion of them are owned by varied Canadian pension plans, whereas U.S.-listed shares don’t have the identical profit. International trade charges are an element, and foreign money markets have additionally been fairly risky, he mentioned.

“In my view the relative inventory efficiency distinction between the Canadian design firms and the U.S.-listed ones is extra a query of the general monetary markets’ efficiency between the 2 nations moderately than something particular to the tariff insurance policies,” Wittmann advised Building Dive in an e mail. “The Canadian-listed firms have loads of publicity to [the] U.S. market.”

Construction activity in Canada has proven modest progress in latest months, in accordance with the Canadian Building Affiliation’s Winter 2025 financial report. Toronto’s crane rely grew by over 20% between August 2024 and February 2025, signaling a strengthening development market, in accordance with Rider Levett Bucknall’s most recent Crane Index, whereas Calgary’s crane rely remained steady. The remainder of the cities surveyed are within the U.S., and 7 of them posted declines, with a 19% home downturn total.

However, the rising trade war is likely to have a significant impact on the Canadian development trade and deliberate and ongoing initiatives, together with price hikes and undertaking delays, in accordance with Canadian legislation agency MLT Aikins. Many Canadian initiatives depend on specialised service suppliers and engineers from the U.S. as vital parts of initiatives.

“In lots of respects, the Canadian and U.S. development industries have change into built-in, with Canadian suppliers promoting many supplies and provides to the U.S. (i.e. lumber) and plenty of Canadian constructors and homeowners relying closely on supplies and provides from the U.S. (i.e. equipment, gear, metal, and so forth.),” in accordance with a weblog put up from the agency.

Canada hits again

Trump’s tariffs present a significant risk for the development trade within the Nice White North, in accordance with the Canadian Building Affiliation. They are going to seemingly translate to elevated prices for homebuilding and trade-enabling infrastructure, and likewise impression provide chains and buying and selling relationships.  

The levies will harm the built-in economic system that Canada and the U.S. share, mentioned Rodrigue Gilbert, president of the Canadian Building Affiliation, in a March assertion.

“The Canadian and American development industries rely closely on free-flowing provides of important development supplies. These pointless tariffs will lower productiveness, hurt financial progress and put vital initiatives and numerous development jobs in danger — on either side of the border,” mentioned Gilbert.