Thursday, October 16, 2025

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Building Construction Costs Are Surging Across Canada Amid Lumber Shortages, High Demand

Costs for both residential and non-residential building construction across Canada rose by the most last quarter, amid low lumber supply and surging demand for housing amid the pandemic.

According to Statistics Canada, prices for residential building construction jumped 5.6% in the first quarter of 2021, marking the largest increase on records dating back to 2017. Similarly, non-residential building construction prices rose 1.5%, largely due to elevated construction costs among factories and warehouses.

In the first quarter, construction costs increased across all building types, from a 1.2% gain for office buildings, to a 6.9% jump for townhouses, followed closely by single-detached houses which were up 6.8%. The broad increase in construction costs is predominantly attributed to an ongoing shortage of construction materials and the subsequent price hikes. Costs for softwood lumber and veneer and plywood rose 11.9% and 20.1%, respectively, in March— the fasted year-over-year pace on record.

The skyrocketing residential construction costs were also the result of historically low mortgage rates and the pandemic-related surge in demand for more spacious housing. Residential building construction costs jumped by the most in Calgary, Toronto, and Ottawa, with increases of 16.8%, 15%, and 14.6%, respectively.


Information for this briefing was found via Statistics Canada. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

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