Canada has experienced a sharp increase in building costs recently. There are several factors contributing to the building material increases in Canada.
- When COVID-19 lockdowns were in full affect, many property owners started and or finished renovation projects. Some hotels, motels, clubs, recreation facilities, offices, churches, and commercial buildings had limited occupation or were unoccupied or had limited usage during the pandemic lockdowns. Property owners took advantage of these lockdowns to conduct upgrades that would normally disrupt use of the buildings.
- Many suppliers for lumber and other building materials shut down temporarily due to COVID-19 restrictions. This created a supply shortage.
- Central banks lowered interest rates to spur economic activity creating a general increase in demand.
- Border restrictions have delayed material movement and made trade more complex from a cost and time perspective. Lumber sitting in warehouses and docks negatively impacts prices, timelines, and supply.
- The United States often takes precedence for material suppliers as it is much larger market. The comparatively smaller Canadian market competes with the United States for everything needed to build. This causes shortages, increased costs and delays.