Global Vantage: Navigating Canada’s Counter-Tariffs Impacts on Construction

Canada’s construction industry is entering a new phase of trade uncertainty, and contractors who plan ahead will be best placed to manage it.

On 25 August  2026, Canada announced retaliatory tariffs matched dollar-for-dollar against $27.6 billion of American goods, responding to the United States’ 50 per cent tariff on Canadian exports. The measures took effect September 8, 2026, applying to U.S.-origin goods meeting the qualifying country-of-origin criteria; shipments that were already in transit before that date are exempted.

What the Construction Industry Should Watch

The tariffs will certainly impact the Canadian construction sector, given its reliance on imported steel, aluminum, and wood products. Tariffs on primary and structural U.S. steel and aluminum products are rising from 25 to 50 per cent, while certain derivative products remain at the existing 25 per cent rate. Existing duties of 25 to 50 per cent on lumber and plywood remain unchanged. Affected inputs range from structural steel and pipe fittings to wire, HVAC equipment, appliances, flooring, and tools and heavy equipment such as cranes and forklifts.

The industry does have noteworthy domestic capacity: 2024 figures show Canadian suppliers already provide roughly 60 per cent of the manufactured inputs used in construction, with about 25 per cent currently sourced from the U.S. Some near-term price and supply adjustments are to be expected while the market recalibrates, but redirected export capacity and Ottawa’s exemption of 179 steel mill products with no domestic equivalent should help ease that transition.

There may, however, be a benefit for builders. Lumber that would otherwise be exported to the U.S. may instead remain in Canada, which could help moderate domestic lumber prices, although any resulting reduction in overall project costs is likely to be modest.

Government Support Is Available

Contractors affected by the trade dispute are not without support. The federal government has added $7.5 billion on top of the $25 billion already committed to off-set the impacts of this trade dispute through grants, loans, regional financing, worker-support programs, and business adaptation funding. Programs vary in eligibility and timing, so it is worth checking which options may apply to your business.

Managing Tariff Risk Under Construction Contracts

For contractors working under CCDC standard form contracts, there is some reassurance in that these forms are generally well-equipped to handle this kind of change. GC 10.1 of CCDC 2-2020 is generally considered broad enough to capture tariffs as a tax or duty imposed on the contractor in carrying out the work, and GC 10.1.2 requires a corresponding adjustment to the contract price if duties change after a bid is submitted, whether costs rise due to a new tariff or fall if one is later reduced. Language should be added via supplementary condition for contractors who want to ensure non-tariff countermeasures that impact their business are eligible for relief as well.  Most CCDC forms include similar protections, with the exception of the cost-plus forms, CCDC 3 and CCDC 5B, where tariffs are simply reimbursed as incurred. The mentioned CCDC tax and duty relief language is typically added back in under the CCDC 5B when converted to a stip sum or gross maximum price option.

With the right contract terms in place, tariff volatility can be a manageable risk. This is an important moment for contractors to confirm how specific purchases are classified, revisit pricing on affected items, and ensure their contracts clearly address tariffs, changes in law, and price escalation.

Contact Us

Our team has extensive experience in advising contractors on the management of trade-related risk in contracts. As the regulatory and economic landscape continues to evolve, we are well placed to help clients assess the potential impact on both ongoing and future projects, and develop appropriate mitigation strategies.

If you have any questions regarding the information discussed in this article, please contact Andrés Durán and Sherry Hussain.