Rising costs from Canada-U.S. trade war putting pressure on Brandon construction firms
Cost planning has become like 'picking a number out of a hat,' industry spokesman says
Skyrocketing costs and unpredictable tariff policies in the continuing trade war between Canada and the United States are forcing construction companies to reconsider some projects, with some put on hold or scrapped, an industry official says.
On March 11, the White House said President Donald Trump would go ahead with a 25 per cent tariff on Canadian steel and aluminum, with additional tariffs expected on April 2.
Bracing for price hikes on Canadian goods, builders in Brandon, Man., are scrambling to buy products including lumber and steel or find new suppliers.
"It makes it hard … to plan a project that might not be built for a year or two years out, but they have to forecast the price now," said Shawn Wood, executive director of the Construction Association of Rural Manitoba. "Really, it's picking a number out of a hat."
Prepping for summer projects has been a whirlwind of figuring out product prices and where to get building materials, says Matt Berg, president of Livingstone Landscaping in Brandon. He says tariff uncertainty already has some clients pumping the brakes on projects.
"Customers are confused. We're confused. Not a whole lot of people know what's going to be happening," Berg said.
Berg says his firm is researching products that can be found in Canada to help limit tariff impacts and offer more predictable pricing.
However, he adds, it's hard to figure out whether it's worth switching to a new supplier when they don't know how tariff threats will play out.
"You don't want to really make that investment into a huge change if this is … short-lived," Berg said.
Prices soar, construction dips
Wood says tariffs on products such as lumber, steel, oil and aluminum affect all parts of construction, from the cost of insulation to asphalt shingles. Those costs are major factors in bidding on a project.
He expects projects already in place will stay the course, but warns construction projects will slow down if material prices soar.
"Depending on how quickly more tariffs come into place, it may not be an option for places to stay open," Wood said. "If we can't get the material, if we can't make project deadlines … that could cost companies hundreds of thousands, of billions of dollars."
Keller Developments, which is building a 132-unit complex on Brandon's North Hill, expects to start moving people into some units on May 1.
It's taken about five years to get the units planned, built and move-in ready, says owner Evan Keller.
Tariff uncertainty makes it harder to plan for these big projects because companies don't know what the market will look like in the coming months or years.
Keller pre-purchases materials as much as possible, so a lot of current projects are covered, he says. However, he cautions, the toxicity of the markets means some planned builds may not happen.
Bracing for costs
In the last week, Keller has received warnings from multiple suppliers that the tariffs will bring big price increases.
Keller says they pre-contract a lot of products to lock in pricing for the year, but that's not always possible. They're also trying to find new suppliers for items like rebar that are expected to be slammed by tariffs.
They're already seeing steel and aluminum prices rise, and he now worries they could see scary increases of 400 or 500 per cent on items such as lumber, as they did during the COVID-19 pandemic.
Keller expects to see construction in the city ramp up over the next six months in a race trying to get ahead of tariff charges and other costs that will add millions to projects.
He thinks housing may be a saving grace for the industry in Brandon, because it's always in demand in the city of 54,000.
The Brandon Chamber of Commerce is hearing concerns that short-term uncertainty about tariff dates and prices will have major long-term impacts, says vice-president Jennifer Ludwig.
Even if tariffs are delayed, Ludwig said, "that's not helpful because the threat of it is just sitting there on your shoulder."
Businesses are trying to mitigate risks where they can, but construction firms need to predict prices years in advance, she said.
"Construction …it's not something that you're just going to do overnight," said Ludwig. "How do you plan when you have no idea what's going on on a day-to-day basis?"
Livingstone Landscaping's Berg already sees more customers hesitant to start new projects or opting out of builds altogether. He doesn't feel great about the future.
"You're already in a stressful situation trying to manage when the demand is somewhat soft already," he said. "It's just another strike against you."
