Meant to sting U.S., Canada's retaliatory tariffs would hurt home building here, P.E.I. group warns

The Construction Association of P.E.I. says the uncertainty around U.S. tariffs on Canadian imports, and what Canada will do to strike back, will have a major impact on people planning to build on the Island this year.

"Until we get a little more information on what we are dealing with, it's really hard to get a full understanding of what's next," said Sam Sanderson, executive director of the association.

After briefly imposing 25 per cent tariffs on all Canadian goods heading south of the border, on Thursday afternoon U.S. President Donald Trump paused the measure until April 2 for all goods covered under the Canada-U.S.-Mexico Agreement (CUSMA).

"As a result, Canada will not proceed with the second wave of tariffs on $125 billion of U.S. products until April 2nd, while we continue to work for the removal of all tariffs," Canadian Finance Minister Dominic LeBlanc said later in the day. 

It's hard to say what Trump will do next. However, the thought of what Canada might do to retaliate with counter-tariffs as the April 2 deadline approaches is looming large on Sanderson's mind.

"Close to 60 per cent of materials come out of the U.S. So that in itself is going to have a big impact on the industry," he said. "Potential cost increases, shipping availability are going to be factors as well."

Steven Myers, P.E.I.'s minister of housing, land and communities, said he is "not a big fan" of retaliatory tariffs.

"I realize we're in a trade war and we're kind of getting pushed around a little bit, but we have to be careful, when we put measures on our side of it, we're not negatively impacting an industry," he said.

"We've spent a lot of money to try and get the industry up and rolling and [building] housing that can help us out of the crisis we are in. The last thing on earth we want now is to add a whole bunch of money onto the final total so that it becomes even more unaffordable."

Steel and specialized products

The U.S. ships steel into Canada for home construction along with mechanical and electrical products, Sanderson said.

"The vast majority of some of those come out of the U.S. We saw it during COVID; some of the specialized mechanical equipment and stuff was very delayed… upwards of a year or better for some specialized equipment," he said, adding that those products are essential for heating and cooling in large buildings.

Charlottetown MP Sean Casey said it's a fluid situation, but he believes U.S. tariffs will raise the cost of construction on the Island.

"It's hard to predict which will be hit the most. As of 48 hours ago, it was 25 per cent on everything," he said. "There is no predictability with President Trump."

The uncertainty of the situation will cause "havoc" with the markets, he said.

"Until that all stabilizes, it's hard for anyone to plan. I really do think it will hold us back until we can see a way forward."

For the meantime, some in the local construction industry have begun trying to source building products from other parts of the world, Sanderson said.

"I firmly do believe it's time we do start looking at other markets, and we don't know what's available out there until we go looking," he said.

We want to go Canada first — but there is a whole big world out there.— Sam Sanderson

"Let's go out and find our own resources, whether it be from another jurisdiction of Canada — we want to go Canada first — but there is a whole big world out there." 

To the point, Sanderson said P.E.I. needs a shipping container port to make it easier to get products landed here.

"Having availability for a container will not only help our export industry, but also help our import industry," Sanderson said.

Sanderson said he isn't too worried about interprovincial trade barriers when it comes to construction, but he did say cutting tolls on the Confederation Bridge or the Wood Islands ferry would make it even easier to ship from province to province.