The Canadian Home Builders’ Association (CHBA) isn’t mincing words about the detrimental effects a trade war will have on housing starts in Canada. According to CEO Kevin Lee, U.S. tariffs of 25 per cent and Canada’s countervailing tariffs will impact housing construction costs and timelines for both countries; however, the greater concern is how these tariffs will impact Canada’s overall economy.

“A slowing economy invariably means slowing housing starts, which will have expansive repercussions on housing supply, Canada’s residential construction industry, and long-term affordability,” he said.

To minimize long-term economic impacts, CHBA consulted with the federal government regarding counter tariffs, and recommended not putting any on construction materials; it also provided advice on how government officials should best target U.S. imports to reduce impacts on Canadian businesses and construction costs.

According to Lee, the key is to end the trade war as quickly as possible, on fair and acceptable terms for Canada, while taking steps to offset tariff-imposed increased costs of construction. CHBA’s Municipal Benchmarking Study outlines ways in which municipalities and other levels of government can help.

“Reducing development charges [in cities where they are high] could more than offset any increased construction costs from tariffs,” Lee said. “Measures to speed up approval processes can also save costs to offset increases from tariffs. At the Federal level, we’ve long called for fixes to the GST on new home construction, and again, those fixes could offset tariff costs, and, like development charges, should be fixed anyway.”