At the Ontario Construction Secretariat (OCS) conference, the spectre of tariff tensions lingered as delegates absorbed forecasts on the economic impact of a brewing trade war. This pivotal event took place in Toronto on March 6, shortly after the U.S. implemented a 25% tariff on various Canadian imports, excluding a 10% reprieve for oil and gas products. Alarmingly, the Ontario Building Trades Council warned that these tariffs could jeopardise 100,000 construction jobs across Canada.
Robert Kavcic, a senior economist from BMO, discussed the unpredictable nature of tariffs, flipping back and forth like a pendulum. He explained that the economic forecasts are based on a one-year assumption of these tariffs, predicting a 1.5% reduction in real GDP growth by 2025, landing at approximately 0.5%. Ontario was highlighted as the province likely to be hardest hit, with a forecasted decline of 0.2%.
Kavcic noted the inherent uncertainty in his predictions, emphasising that trade wars affect everyone negatively. He stated, “The takeaway here is that trade wars are pretty much bad for everyone.” The Canadian Construction Association echoed these sentiments, foreseeing dampened productivity, escalating building costs, and potential job losses in the construction sector.
He projected two quarters of negative growth for the year but anticipated a recovery in the latter half, with GDP growth returning to anywhere from zero to 0.5%. Meanwhile, the Bank of Canada’s predictive analysis estimated a more significant potential decrease of about 2.5% in GDP growth.
Ian Cunningham, of the Council of Ontario Construction Associations, highlighted that the context of tariffs differs markedly from pandemic impacts, urging stakeholders to maintain adaptability in a fluid economic environment. The dialogue at the conference included calls for government investment to enhance economic output, with assessments from both the federal and provincial authorities stating their commitment to the construction industry.
Kavcic expressed confidence that the Bank of Canada would respond to mounting economic pressures by lowering base rates, potentially reaching 2.0% this summer. The anticipated gradual recovery of Canada’s housing market, however, may be stunted this year due to the uncertainties brought on by the ongoing tariff disputes.
Various conference speakers noted looming job losses, production cuts, and their effects on the Canadian dollar. Bob Collins from BuildForce Canada anticipated increased hesitancy in project decisions as market participants adopt a “wait and see” attitude amid tariff fears. Beyond the discussions, the event served as a vital networking platform, fostering strong connections between contractors and union representatives, as highlighted by OCS researcher Katherine Jacobs.
The OCS conference underscored the significant economic implications of U.S. tariffs on Canada, predicting a 1.5% reduction in GDP growth and potential job losses in construction. Experts called for adaptability amidst the uncertainty and highlighted the essential role of government investment to support the industry. Networking opportunities at the event aimed to build relationships and foster collaboration among stakeholders.
The OCS conference revealed critical insights into the impending challenges posed by U.S. tariffs on Canadian construction and the broader economy. Projections show a significant decline in GDP growth, alongside increased building costs and potential job losses. Flexibility and adaptability emerged as essential strategies for navigating this unpredictable landscape, while government support was deemed crucial to bolster industry resilience. As stakeholders brace for uncertain times ahead, continued dialogue and collaboration will be vital in steering through these turbulent economic waters.
Original Source: canada.constructconnect.com
