Canada experienced an average year-over-year construction cost increase of 4.96% (above the national average of 4.50%). These cities include Toronto (5.08%) and Calgary (4.84%).
Toronto and Calgary are navigating a transformative period in construction, shaped by economic uncertainty, labor shortages, and evolving market dynamics. Both cities are experiencing a recalibration in construction costs—Toronto has seen a decline due to reduced building activity and softer demand, while Calgary faces sharp increases in material prices, specifically steel and electrical components.
Labor remains a critical challenge across both markets. In Calgary, skilled labor shortage is compounded by an aging workforce and training gaps, while Toronto’s labor market is strained by immigration enforcement and a thin talent pipeline.
Despite these pressures, innovation is driving resilience. Builders in both cities are investing in modular construction, BIM modeling, and AI-powered forecasting to streamline workflows and mitigate delays. Calgary is leading in climate adaptation, using heated enclosures and impact-resistant materials to combat extreme weather, while Toronto developers are leveraging favorable pricing conditions to pursue purpose-built rentals and industrial projects.
Trade policy remains a wildcard. Tariffs on steel and aluminum are influencing material costs, though Toronto’s exposure to U.S.-sourced inputs is relatively low. Calgary, on the other hand, is more vulnerable to supply chain disruptions, with 12-week lead times for critical components like transformers and HVAC systems.
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