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With this week\u2019s announcement of the Trump administration\u2019s 25 percent tariffs on Canadian steel and aluminum, the Ontario Home Builders\u2019 Association (OHBA) is greatly concerned by how the new tariffs will negatively impact housing in Ontario.\u00a0<\/span><\/p>\n The potential for economic slowdown due to the tariffs may be most impactful to the housing sector. Canada is the largest exporter of steel and aluminum to the United States, the negative impact from tariffs on these industries will likely have ripple effects across the Canadian economy, particularly Ontario. This economic slowdown will likely lead to decreased investment in residential real estate and fewer housing starts, and would surely erode the progress made to increase the supply of housing and improve affordability for Ontarians.\u00a0<\/span><\/p>\n \u201cWe\u2019re at a turning point, not only for the Canadian economy, but specifically for the housing sector in Ontario. I\u2019m worried about the effect that these new tariffs will have on residential construction,\u201d said Scott Andison, CEO of OHBA. \u201cThe potential impact of an economic slowdown, job loss, and decreased investment in residential real estate, could be a brutal blow to the housing sector and therefore to housing affordability for Ontarians.\u201d\u00a0<\/span><\/p>\n The tariffs on steel and aluminum will also lead to an increase in costs for key construction materials for new homes, including projects already underway. Increasing construction material costs means increased construction costs overall, and therefore an increase in the price of new homes for potential purchasers. This would only compound the effects of decreased investment in housing, a sector that is already struggling to keep up with rising costs due to inflation.\u00a0<\/span><\/p>\n Moreover, given the importance of steel and aluminum to our trading relationship with the United States, the new tariffs will likely result in a weaker Canadian dollar, which would again further contribute to increasing construction costs in Ontario. Retaliatory tariffs, that may be necessary for political reasons, would exacerbate the effects described above.\u00a0<\/span><\/p>\n \u201cWhile retaliatory tariffs may be needed, I\u2019d like to see construction materials, particularly those vital to the residential construction industry, excluded,\u201d noted Andison. \u201cWe don\u2019t want to make a bad situation worse.\u201d\u00a0<\/span><\/p>\n OHBA will look to work with the provincial government to minimize the impact of these tariffs on the residential construction industry. However, between the risk of a downturn, increased costs of construction materials, and currency risk \u2013 the potential exists for the impact of these tariffs on housing to be devastating.\u00a0<\/span><\/p>\n \t\t\t\t<\/div>\n