How steel, aluminum tariffs could impact construction industry

Prospective home buyers could be facing a new challenge as U.S. tariffs impact the construction industry. CTV’s Spencer Turcotte explains.

The idea that a 25 per cent tariff on aluminum and steel could be stacked on top of other 25 per cent tariffs means serious implications for the construction industry and its customers.

The worry is if these planned measures proceed, it will lead to increased costs for new construction projects, as well as ones already underway.

General contractor Woodhouse Group is close to wrapping up a project in downtown Kitchener, where recycling materials has been top of mind, which could come in handy with hefty tariffs looming.

“A lot of material saved, a lot of unnecessary waste in the landfills,” said Shaun DeLorey, Woodhouse Group COO. “We do a lot of adaptive re-use projects. If we don’t have to use steel, can we use wood in certain places or different materials?”

Although, it is hard to stay away from steel and aluminum entirely.

“It goes down to the screws and nails, so we are impacted by that. There are certain situations where we do need the raw materials. We do need steel columns and beams,” said DeLorey.

If prices skyrocket and there are delays in getting that material, they may look at different options like re-enforced concrete or engineered wood.

“There potentially will be [increased] costs, but there could be some good things out of this as well. If we are re-using materials, you know, we’re not filling the landfills,” DeLorey said.

For home construction, the situation is being described as a little more dire. That’s even if Canadian-made metal is being used.

“If producers of steel in Canada and their markets include the U.S., and all of a sudden their products are less attractive financially in the U.S. market, they’re going to be selling less in the U.S. What happens? Then they’ve got an overproduction and they’re going to try and ratchet that back,” said Scott Andison, CEO of the Ontario Home Builders’ Association.

To complicate matters further, this comes in the middle of a housing crisis.

“It’s obviously an essential component of building, certainly in single family mid-rise homes.,” said Andison. “But when you think about condo buildings and apartment buildings, all of those are aluminum studs.”

Experts are concerned there is the potential for decreased investments in residential real estate and fewer housing starts, which ultimately points to one thing:

“Adding this on top of it will only accelerate, I believe, the impact on layoffs in the industry,” said Andison.