Barrie Construction News staff writer
Contractors across Ontario are facing mounting uncertainty as tariffs on building materials such as steel, aluminum, and other imports create ripple effects across the construction industry. With the United States reimposing steep tariffs on Canadian steel and aluminum—and Canada responding with its own countermeasures—the cost and availability of construction materials have come under new pressure.
Both the Canadian Construction Association (CCA) and the Residential Construction Council of Ontario (RESCON) have issued guidance to help firms navigate this shifting landscape. Whether you’re bidding on new work, midway through a project, or reviewing supplier agreements, understanding the legal and financial risks of tariffs is critical to protecting your bottom line.
The CCA urges contractors to review existing contracts for clauses that address tax or customs duty changes. For example, CCDC 2 (Stipulated Price Contract) includes a clause—GC 10.1—that may allow adjustments if tariffs are imposed after contract signing. However, if your contracts don’t include such provisions, you may be on the hook for increased costs due to tariffs, even on projects already underway.
For new contracts, the recommendation is clear: raise the issue of tariffs early in the negotiation process and seek the inclusion of duty-adjustment or price escalation clauses. Standard wording is available through CCA documents, and many legal advisors now consider such clauses essential.
If your company tends to use boilerplate agreements or informal terms, this is the time to revisit and strengthen your contract templates to reflect tariff-related risks.
Risk management strategies
In a recent bulletin, the CCA’s General Contractors National Advisory Council outlined practical steps contractors can take to reduce exposure to tariff-driven cost increases.
Among the most effective strategies:
- Lock in pricing early: Work with your suppliers and subcontractors to secure pricing before tariffs take effect.
- Build flexibility into your procurement: Diversify your supplier base to include domestic or non-U.S. sources when possible and avoid sole-sourcing high-risk materials.
- Include escalation clauses: For longer-term projects, allow for pricing adjustments tied to indexed material costs or specific tariff events.
- Monitor trade developments: Stay updated on government announcements that could impact tariffs on construction inputs.
The CCA notes that tariffs can add 3%–5% to total construction costs, and the impact can be significantly higher on material-intensive projects such as industrial builds or infrastructure work.
The view from RESCON: Housing at risk
RESCON has raised particular concern about the effect of tariffs on the residential construction sector. President Richard Lyall has warned that new tariffs will only worsen Ontario’s housing affordability crisis by increasing material costs, delaying project timelines, and potentially halting developments that are already financially tight.
“Tariffs act like a hidden tax on every new home being built,” Lyall said in a recent interview. “The end result is higher prices for buyers and more risk for builders.”
RESCON is urging policymakers to find alternatives that protect Canadian construction companies and homebuyers without inflaming a trade war that ultimately hurts both sides of the border.
If you’re caught mid-project
If tariffs take effect during an active project—and your contract lacks an adjustment clause—it’s still worth documenting the financial impact. You may be able to negotiate relief or a cost-sharing arrangement with the project owner, especially if you can present detailed material invoices, supplier notices, or customs records showing the cost increase.
Even if unsuccessful in obtaining reimbursement, having documentation may help you manage disputes and protect your reputation for transparency and professionalism.