Building construction price indexes, quarterly change, second quarter of 2025. (Source: Statistics Canada, Table 18-10-0289-02.)
The cost to build is on the rise, reports Statistics Canada in its latest quarterly look at building construction price indexes. According to Canada’s statistical agency, residential building construction costs increased one per cent in the second quarter, following a 0.9 per cent increase in the previous quarter, while non-residential building construction costs rose 1.6 per cent in the second quarter, following a one per cent increase in the previous quarter.
Year over year, construction costs for residential buildings across the 15-census metropolitan areas (CMA) included in the composite rose 3.7 per cent in the second quarter, while non-residential building construction costs were up four per cent.
American tariffs and Canadian countermeasure tariffs were cited in the report as causes of increased volatility in both pricing and availability of certain materials. Builders reported that uncertainty surrounding tariffs and tariff countermeasures also continued to create challenges in securing contracts and has contributed to delays in project starts. At the same time, persistent skilled labour shortages continued to push labour rates higher in several regions across the country. As building activity remained modest in many regions of the country in the second quarter and project starts were delayed, competition for available work intensified in some areas, putting pressure on margins.
Price increases at the component level were partly influenced by rising construction material costs, including some affected by tariffs and associated countermeasures. However, subdued construction activity in major regions like Toronto and Vancouver offset upward pressure at the aggregate level, says Statistics Canada.
In the second quarter, residential building construction costs rose across all 15 CMAs measured, although increases varied widely by region. Quebec experienced the largest quarterly increase, driven by higher wage rates. Regina experienced the second strongest increases in costs, followed by London and Montreal. Calgary and Toronto experienced the lowest quarterly growth in residential construction costs.
Costs to construct non-residential buildings increased the most in Quebec, followed by Montreal and London in the second quarter. The increases reported across the province of Quebec were primarily driven by rising labour costs, while all regions measured experienced price increases concentrated primarily in divisions that rely heavily on metal-based materials such as plumbing, metal fabrications and structural steel. Victoria and Halifax recorded the smallest increases.
