Trade battle set to rattle up condo prices
Housing in Canada’s metropolitan areas is barely affordable as it stands, but the United States-versus-everybody trade tirade affects one of construction’s most valuable supports: steel.
“Canada imposed a 25 per cent tariff on U.S. steel imports on July 1, retaliating against levies President Donald Trump slapped on goods from its northern neighbour a month ago. Prime Minister Justin Trudeau’s government is also said to be preparing quotas and tariffs for other countries to prevent a flood of steel rushing in to undercut prices,” reports Bloomberg.
Steel makers and metal importers believe that these tariffs will affect the condo market, already experiencing a shortage. The structural steel used to erect buildings and the rebar needed to support the high-rises themselves will increase in price, while jobs and stalled projects are likely as well.
Walter Koppelaar, a steel and construction chief executive officer based in Hamilton, is concerned for the Canadian market.
“If the government’s not careful, they will protect one at the expense of ten times that elsewhere … If they apply duties to broad-spectrum steel or metal of any shape, size or description, our industry here would be decimated – it could be thousands of layoffs and it’s going to shut down projects right across the country,” he said.
This year alone, the price of steel used in construction projects all over Canada has already increased by about 38%. The booming construction industry has seen a lack of supply mixed with peaking housing demand in certain areas, which only impacts the national market.
The Canadian Coalition for Construction Steel (CCCS) sent a letter to the government, stating that "Additional safegaurd taxes of even 10 per cent will put fabricators and purchasers into a loss position and they will not be in a position to supply the market." This coalition represents 17 companies.
British Columbia is expected to get hit hard; the province relies on imports for "more than 60 per cent of its annual consumption," according to the CCCS.