If you’ve received a renovation quote recently and been shocked by the price, you’re not alone. Contractors across Canada are raising rates, and while inflation plays a role, the bigger culprit is global trade wars. Tariffs, supply chain disruptions, and material shortages are forcing contractors to adjust pricing—or risk losing money on projects.
In this blog, we’ll break down:
- How global trade tensions directly impact local construction costs
- The key materials driving up contractor expenses (lumber, steel, appliances, etc.)
- Why labor costs are also climbing (and how it connects to trade policies)
- What homeowners can do to manage rising renovation costs
- Expert insights on when (or if) prices will stabilize
By the end, you’ll understand why your contractor’s estimate is higher than expected—and how to navigate this challenging market.
The Hidden Forces Behind Contractor Price Hikes
1. Tariffs on Building Materials (The Biggest Cost Driver)
Canada relies on imported construction materials, and when trade disputes lead to tariffs, those costs get passed down.
- U.S. tariffs on Canadian lumber (averaging 11-20%) → Higher wood costs for framing, flooring, and cabinetry.
- U.S. & China tariffs on steel/aluminum (up to 25%) → More expensive structural beams, nails, and appliances.
- Chinese-made fixtures & electrical components (10-25% tariffs) → Pricier sinks, lighting, and wiring.
Source: China vows to ‘fight to the end’ against latest Trump tariff threat
2. Supply Chain Delays = Higher Project Costs
ecent U.S. tariffs on Canadian imports are causing significant supply chain disruptions, leading to:​
-
Longer wait times for materials → Delayed projects → Increased labor costs.​
-
Sudden price surges mid-project (e.g., lumber prices projected to spike by 40% due to new tariffs). ​GlobalWood
These challenges are exacerbating the housing affordability crisis in Canada.
Source : Homebuilding costs to jump as trade war begins, says RESCON chief
3. Labor Shortages & Rising Wages
Trade Instability Affects Labor Too
The Canadian construction industry is currently facing labor challenges influenced by trade instabilities:​
-
Skilled Labor Shortage: In January 2025, payroll employment in the construction sector decreased by 8,000 (-0.7%), partially offsetting cumulative gains from previous months. However, on a year-over-year basis, there was an increase of 11,900 (+1.0%) in payroll employment, indicating ongoing volatility in labor availability. ​Statistics Canada
-
Rising Wages: Average hourly wages among employees increased by 3.6% (+$1.24 to $36.05) on a year-over-year basis in March 2025, following a 3.8% growth in February. ​Statistics Canada
Real-World Examples: How Trade Wars Hit Home Renovations
Case Study 1: Kitchen Renovation Costs (2020 vs. 2025)
| Item | 2020 Cost | 2025 Cost | Increase | Reason |
|---|---|---|---|---|
| Cabinets | $8,000 | $11,000 | +37.5% | Tariffs on imported wood/MDF |
| Countertops | $4,500 | $6,200 | +38% | Quartz tariffs (China) |
| Appliances | $6,000 | $7,500 | +25% | Steel tariffs & supply issues |
| Labor | $12,000 | $15,000 | +25% | Skilled labor shortage |
| Total | $30,500 | $39,700 | +30% | Combined trade & labor impacts |
These figures illustrate the compounded effect of trade disputes and labor shortages on home renovation costs in Canada.​
Case Study 2: Deck Building (Lumber Price Volatility)
-
Pre-2020: $15,000​
-
2021 Peak: $28,000 (+87%)​ Statistics Canada
-
2025: $20,000 (+33% from pre-pandemic)​
The proposed 25% tariff on Canadian lumber, set to take effect in April 2025, is expected to further increase construction costs, impacting affordable housing. ​
Source : PBS: Public Broadcasting Service
These examples underscore the significant impact of trade policies and labor market challenges on the Canadian home renovation sector.
What Can Homeowners Do?
1. Lock in Quotes Early
- Prices fluctuate weekly—sign contracts before materials rise again.
2. Opt for Alternative Materials
- Instead of hardwood floors → Luxury vinyl plank (LVP).
- Instead of granite counters → Butcher block or laminate.
3. Phase Your Project
- Break renovations into stages (e.g., frame now, finish later).
4. Negotiate with Contractors
- Some may offer discounts for off-season work or cash payments.
When Will Prices Stabilize? Expert Predictions
- Lumber: Expected to remain 20-30% above pre-pandemic levels long-term.
- Steel/Tariffs: No major relief until U.S.-China tensions ease.
- Labor Costs: Will keep rising with housing demand outpacing tradesworkers.
Source: Trump hits 90-day pause on reciprocal tariffs, but raises China’s to 125%
Conclusion: Navigating the New Normal
Global trade wars aren’t just headlines—they’re directly inflating your renovation costs. Contractors aren’t raising prices arbitrarily; they’re responding to real material and labor challenges.
By planning ahead, exploring alternatives, and staying flexible, homeowners can still achieve their renovation goals—without blowing the budget.
Further Reading:
-
China urges U.S. to ‘immediately’ cancel reciprocal tariffs, vows countermeasures
-
Trump tariffs live updates: Trump raises rate on China to 125%, pauses ‘reciprocal’ tariffs on other countries
-
Stock markets skyrocket after Trump announces 90-day pause on some tariffs, 125% rate for China
Have you experienced price hikes on your renovation? Share your story below!
