Ontario’s housing sector in for ‘severe repercussions’ with Trump’s tariffs: builders

Trump’s Tariffs and Their Impact on Ontario’s Housing Sector

The Ontario housing sector is bracing for severe repercussions following U.S. President Donald Trump’s decision to impose sweeping tariffs on Canadian imports. The Ontario Home Builders’ Association (OHBA) has issued a stark warning, stating that these tariffs, along with the Canadian government’s retaliatory measures, will have a devastating impact on the province’s already struggling housing market. The U.S. has implemented a 25% tariff on imports from Canada and Mexico, with a lower 10% tariff applied to Canadian energy exports. China has also been hit with a 10% tariff. These trade measures come at a time when Ontario is attempting to meet an ambitious goal of building 1.5 million new homes by 2031, a target that is already facing significant challenges.

The Canadian Government’s Response to U.S. Tariffs

In response to the U.S. tariffs, the Canadian government has vowed to take strong retaliatory action. Prime Minister Justin Trudeau’s administration has announced plans to impose tariffs on $30 billion worth of U.S. goods immediately, with an additional $125 billion in tariffs set to take effect 21 days later. Ontario Premier Doug Ford has also pledged to take decisive steps, including canceling a $100-million deal with Elon Musk’s SpaceX for Starlink internet services in remote areas. Additionally, the LCBO has been instructed to remove U.S. alcohol from its shelves, with its website temporarily taken down to facilitate the removal of these products for online shoppers. These measures underscore the escalating trade tensions between the two nations and the potential for widespread economic disruption.

Ontario Premier Doug Ford’s Bold Measures

Premier Doug Ford has emphasized his commitment to defending Ontario’s interests in the face of escalating trade tensions. Among the measures under consideration is the potential legislation of a “Buy Ontario” policy, aimed at prioritizing local products and services. Ford has also made headlines by threatening to cut off energy exports to certain U.S. states if the tariffs negatively impact Ontario. While his team has clarified that such measures would not be implemented all at once and would instead be phased in, the rhetoric signals a tough stance in response to the U.S. tariffs. These actions, while intended to protect Ontario’s economy, may also contribute to further economic uncertainty and potential retaliatory measures from the U.S.

Industry Leaders Sound the Alarm on Housing Affordability

The Ontario Home Builders’ Association (OHBA) has expressed grave concerns about the impact of the tariffs on the housing sector. Scott Andison, CEO of OHBA, highlighted the already precarious state of the housing market, noting that a builder he recently spoke to had sold only two houses in all of 2024. The introduction of tariffs, Andison warned, could exacerbate the situation, leading to even greater economic hardship for builders and consumers alike. Richard Lyall, president of the Residential Construction Council of Ontario, echoed these concerns, stating that the tariffs would increase the cost of building materials, ultimately passing these costs on to homebuyers. This, he argued, would further slow down residential construction activity and worsen the already dire housing affordability crisis in Ontario.

The Challenges of Meeting Ontario’s Housing Goals

Ontario’s housing sector was already facing significant challenges before the imposition of the U.S. tariffs. In 2022, the province announced an ambitious plan to build 1.5 million new homes by 2031, requiring an average of 150,000 new housing starts each year. However, the province’s financial watchdog cast doubt on these targets in a recent report, citing stalled construction and a sharp decline in the number of new single-family homes being built—numbers that are at their lowest in nearly 70 years. During the recent election campaign, Premier Ford’s Progressive Conservatives pledged $50 million to support factory-built homes and innovative home-building technologies, as well as the appointment of a permitting and approvals czar to streamline the development process. Despite these measures, the introduction of tariffs has introduced a new layer of uncertainty, threatening to derail progress toward these housing goals.

The Road Ahead: Mitigating the Impact of Tariffs

In the face of these challenges, the OHBA has expressed a willingness to work with the Ontario government to minimize the impact of the tariffs on the housing sector. However, the association has cautioned that the potential consequences of these trade measures could still be devastating. As the situation continues to unfold, all eyes will be on whether the Ontario government and the broader Canadian government can effectively navigate these trade tensions while keeping the province’s housing goals on track. The coming months will be critical in determining whether Ontario can weather this economic storm and continue to make progress toward addressing its housing affordability crisis. The stakes are high, not just for the housing sector, but for the entire Ontario economy.