OHBA warns of ‘severe impact’ from U.S. tariffs on housing sector

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Ontario Construction News staff writer

The Ontario Home Builders’ Association (OHBA) is raising alarms over the Trump administration’s decision to impose a 25 per cent tariff on all non-energy imports and a 10% tariff on energy imports. While the full effects of these tariffs remain uncertain, OHBA officials warn that they will almost certainly lead to significant repercussions for Ontario’s housing industry.

The tariffs pose a serious risk of economic downturn, with potential consequences including a reduction in housing starts, halted ongoing projects, and delays in completing homes. Even the mere threat of tariffs over recent months has already created significant uncertainty, harming the industry. With housing starts in Ontario already down by 16 per cent in 2024, these tariffs threaten to further destabilize a sector already in decline.

“I spoke to a builder recently who sold only two houses in all of 2024,” said Scott Andison, CEO of OHBA. “The market is already struggling, and there’s no telling how bad the fallout from this additional threat will be.

“Builders across the province are struggling to survive, and this unwarranted act of economic aggression will be devastating for them.”

The uncertainty surrounding tariffs is expected to cause investors to adopt a cautious approach, further stalling new housing projects. As a result, any progress made in recent years to increase housing supply could be undermined. The potential for diminished returns on investment could also lead capital to leave Ontario, a scenario that could have far-reaching consequences for both the provincial and national economies.

Construction costs are also expected to rise, as Canadian suppliers work to replace lost U.S. customers and tariffs drive up the cost of key imports. In addition, a depreciating Canadian dollar could further increase construction expenses, compounding the challenges facing the residential building sector.

“The decrease in housing starts was already significant in 2024. This will lead to more unsold projects, conversions to rental properties, or halted construction,” Andison explained. “We may be looking at a prolonged slump for the housing sector as a result of these tariffs.”

Some municipalities are already seeing alarming declines in housing starts, with areas like Guelph and Brantford reporting decreases of up to 60%. These tariffs are expected to hit certain housing markets harder than others.

The OHBA is committed to working with the provincial government to mitigate the potential impact of these tariffs on the housing sector and affordability. However, the association warns that the consequences could be severe, with the residential construction industry facing an uncertain and difficult future.

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