Q3 2026 Construction Costs: Residential Up 0.8% as Tariffs Push Steel Higher; Toronto Among Smallest Gains at 0.4%

Statistics Canada released its building construction price indexes for the third quarter of 2026 on October 29, and the cost of putting up new homes kept climbing. Residential building construction costs rose 0.8% in the quarter, up from a 0.6% increase in the second quarter. Non-residential building costs rose 1.2%, after 1.4% the quarter before.

Year over year, residential construction costs in the composite of 15 census metropolitan areas (CMAs) were up 2.7%, and non-residential costs were up 4.3%, including extraordinary revisions.

For GTA readers, the headline is a little gentler at home: Toronto posted one of the smallest residential cost increases in the country this quarter, at +0.4%. But "smaller" still means higher, and the drivers StatCan flagged, especially tariffs on steel and metal products, matter a lot for the concrete-and-steel towers that make up much of the region's new supply.

What the index measures

The building construction price indexes track the prices contractors charge to build a new building, covering materials, labour, equipment, overhead and profit. They exclude land, land assembly, design, land development, real estate fees and value-added taxes. On the residential side, StatCan prices four building types: a single-detached house, a townhouse, a low-rise apartment building (under five storeys) and a high-rise apartment building (five storeys or more). Toronto and Ottawa–Gatineau (Ontario part) are among the 15 CMAs measured, along with London.

That makes this release a read on the cost to build, not on what buyers pay for a finished home. Resale prices are set by a different set of forces, and new-home asking prices are tracked separately in StatCan's New Housing Price Index.

Where costs rose fastest, and where Toronto landed

Residential construction costs rose in every CMA measured. Québec led with +2.3%, followed by Regina at +1.8%. The smallest quarterly increases were in Moncton (+0.6%), Toronto (+0.4%) and Vancouver (+0.2%).

On the non-residential side (offices, warehouses, shopping centres, factories, schools and bus depots), Québec and Regina each rose 2.4% and Montréal rose 2.0%. Ottawa and Halifax showed the smallest growth, each at +0.7%.

Steel and metal are doing the heavy lifting

By trade division, metal fabrications posted the largest residential increase at +2.4%, followed by structural steel framing and earthwork, each at +2.0%. Fire suppression and plumbing rose the least, at +0.3% each, and masonry was flat at 0.0%.

Non-residential showed the same pattern: structural steel framing +3.3%, conveying equipment (elevators and escalators) +3.1% and metal fabrications +2.1% led, while communications (+0.5%), fire suppression (+0.5%) and electrical (+0.4%) grew the least.

StatCan tied the metal and steel increases to retaliatory tariffs and ongoing supply chain disruptions. It noted that additional Canadian retaliatory tariffs on US products took effect September 8, 2026, ranging from 15% to 50%, including increases of 50% on certain steel and aluminum products, which added to cost pressures on construction materials and equipment in the quarter. Builders also reported higher material, fuel, transportation and labour expenses, and builders mainly on the east coast and in the Prairies cited capacity pressures and wage increases for skilled trades and subcontractors.

What it means for GTA buyers, builders and investors

New-build pricing has a floor under it. Construction costs are still rising across the country, and the steel-heavy divisions are rising fastest. For pre-construction and new-condo projects in the GTA, that limits how far builders can cut prices before a project stops working on paper, even in a slow sales market.

Toronto's smaller increase is relative, not a reversal. A 0.4% quarterly rise is among the lowest of the 15 CMAs, but it is still an increase on top of earlier ones. Nothing in this release points to construction costs falling.

Watch the rate backdrop alongside costs. This release lands a day after the Bank of Canada raised its policy rate to 2.5% on October 28. Higher financing costs and higher building costs both press on project economics, which matters for how many new units get started in the region over the next few years.

For resale buyers, this is context rather than a price signal. Building costs feed into new-home pricing and supply decisions over time; they do not move resale prices month to month.

One technical note

StatCan extended this release's revision window by one quarter. As a result, the first-quarter 2026 non-residential index was revised up by 0.2%, while the residential index for that quarter was unchanged. The indexes are not seasonally adjusted and use 2023=100.

Sources

• Statistics Canada — The Daily: Building construction price indexes, third quarter 2026 (released October 29, 2026)
• Statistics Canada — Table 18-10-0289-01: Building construction price indexes

Compiled by the Real Estate HQ editorial desk from primary data releases (sources linked above) and reviewed for accuracy. Figures are as reported on the release date; indexes are not seasonally adjusted.