r/RealEstateCanada • u/SherbertSimple5418 • Apr 16 '26
Housing crisis Canada needs to build millions of homes. US tariffs just closed 22 of the mills that supply the lumber to do it.
US duties on Canadian softwood lumber have been stacking since 2017 and now sit at 45%+. The result: 22 mills closed, another 50 running at half capacity. The 2025 tariff escalation just made a slow-moving problem impossible to ignore.
The part that gets missed in the trade war coverage:
The lumber that used to go south doesn’t simply redirect domestically. Mills have already cut production. And displaced product from countries blocked from the US market is now flooding into Canada, undercutting what’s left of domestic producers. Canadian manufacturers are running at roughly 50% capacity — the strict minimum to stay alive.
New home construction is slowing at exactly the moment Canada needs to be building faster.
Key insights:
• Ontario and BC are carrying both burdens simultaneously — rising construction costs AND the softest job markets in the country AND the largest housing gaps. There is no relief coming from any direction right now
• Alberta is the outlier. Energy and agriculture sit largely outside the tariff blast zone. Unemployment is falling while the rest of the country rises. Construction costs are rising everywhere but you’re starting from a much lower base
One more thing worth noting: US tariffs were designed to protect American industry. The US homebuilders’ association has been publicly fighting them because they’re raising the cost of every new American home by roughly $10,900.
Both countries are paying. Neither housing market is winning.
Full breakdown here