The Trade War Is Now a Line Item: What Tariffs Mean for Your Bottom Line
Aurora Insights & Consulting | Alberta Construction Market Intelligence
If you have been watching your steel and aluminum quotes creep up over the last year, you are not imagining it. The U.S.-Canada trade war has moved past headlines and into your project budgets, and for Alberta contractors, it is reshaping how projects get priced, financed, and protected. This post elucidates how the changes impact your business.
What Changed This Year
In August 2026, trade talks between the U.S. and Canada broke down. The U.S. responded with 50% tariffs on about $20 billion in Canadian goods including plywood, engineered wood products, and Portland cement which is in addition to existing tariffs on lumber and steel. Canada responded with its own countermeasures covering roughly $27.6 billion in U.S. goods across 700 product categories, effective September 8, 2026.
The bigger story for construction, though, started earlier: Section 232 tariffs on steel and aluminum doubled from 25% to 50% back in June 2025. By early 2026, steel mill products were up over 20% year-over-year, and aluminum mill shapes were up 33%.
The Cost to Alberta Contractors
Industry analysts estimate current tariffs and countermeasures have added 8 to 12 percent to total project costs in Canada, depending on material mix with steel-intensive projects being hit hardest. This is evident in what we are currently seeing locally: Calgary and Edmonton both posted overall construction cost increases of 4% or more year-over-year, driven mainly by metals (steel, aluminum, and metal-heavy mechanical and electrical components).
On a bright side, lumber is easing rather than adding to the pressure, as post-pandemic oversupply normalizes against demand.
The Real Risk -Tariff Rate vs Timing
The distinction that gets lost in the 8-12% headline is that your exposure depends heavily on when you locked in materials pricing, not just what sector you’re in.
For example, Calgary’s $926-million Scotia Place arena project locked in an $80-million structural steel package early, sourced from Europe and fabricated in Hamilton, and reported only an $11,000 direct tariff impact through mid-2025. But officials are careful to note procurement was only 30% complete at that point, and other major projects, like the Green Line LRT, remain far more exposed simply because their steel packages aren’t locked in yet.
For your business, that’s the actionable takeaway: firms that get ahead of procurement and lock in steel and aluminum pricing early are largely insulating themselves. Firms still shopping mid-project, especially on fixed-price contracts, are the ones absorbing the squeeze.
Why This Impacts Your Cashflow, Not Just Your Estimate
A tariff increase not only make your bid higher, but it can quietly erode margin on work you already priced. On fixed-price or lump-sum contracts, a mid-project material price increase comes straight out of your profit, because you can’t pass it through. On Cost-plus or Guaranteed Maximum Price contracts, the exposure shifts to the owner, but you still feel it through higher deposits, longer supplier payment terms, and holdback calculations based on inflated contract values.
If your 13-week cashflow model doesn’t have room for a material price shock, that’s the gap tariffs will find first.
The Impact on Growth Story vs Margin Story
It is evident that Alberta’s construction sector isn’t shrinking. Non-residential construction employment is projected to rise 8% above 2024 levels by 2026, and the Canadian construction industry overall is projected to see 2.6% real growth this year, supported by federal infrastructure spending and Build Canada Homes.
In other words, volume will continue to hold up while margin gets harder to protect, and this should trigger conversation with your bank, bonding company and your management team.
Mitigating the Risk
1. Periodically review and stress-test your WIP schedule against a 10-15% swing in steel and aluminum pricing on any unlocked procurement.
2. Push for escalation clauses on new contracts for steel and aluminum-heavy scopes, rather than accepting fixed pricing on volatile materials.
3. Treat supplier diversification as a cashflow issue, not just a procurement one. Treat second or third supplier relationship as a working capital hedge, not just a sourcing backup.
Want to see how exposed your current project mix is? Book a free BUILD™ Strategy Session and we will walk through it together.