CCA: ‘Buy Canadian’ rules could have mixed effects

Key Takeaways:

• Despite Canada’s overall economic contraction in Q2 2025, the construction industry grew by 0.24%, showing resilience driven by federal infrastructure investments.
• Rising input costs, labour shortages, and upcoming “Buy Canadian” procurement rules are creating uncertainty for builders, with CCA warning that protectionist policies could increase project delays and costs if not carefully implemented.
• Modest boosts are expected from recent Bank of Canada rate cuts and the Build Canada Homes program later in 2025, but uneven housing demand and regional disparities suggest a slow and uneven recovery.

The Whole Story:

The Canadian Construction Association (CCA) has released its fall 2025 Construction Quarterly Economic Insights report, revealing that while Canada’s economy contracted in the second quarter of the year, the construction industry continued to post gains growing by 0.24% and outpaced the broader economy.

“Canada’s construction industry continues to show remarkable resilience — but that is not without its challenges,” said Rodrigue Gilbert, CCA’s President. “We’re seeing growth in construction activity, fueled by the federal government’s nation-building focus, but rising costs, workforce shortages, and trade uncertainty are making it harder for companies to plan, bid, and deliver projects that Canadians depend on,” said Gilbert.

CCA’s economic report warns that new “Buy Canadian” procurement rules for federal projects, which are expected to take effect in November, could have mixed effects on project timelines and costs. CCA emphasizes that consultation with downstream industries, including construction, is critical to ensuring that domestic sourcing policies strengthen rather than constrain Canada’s ability to build.

“Building strong communities, trade corridors, and critical infrastructure remains a national priority and a priority for our industry, but protectionism adds friction to that mission,” said Gilbert. “We need coordinated trade, procurement, and investment policies that make it easier to build, not harder.”

Looking ahead, CCA anticipates that rate cuts from the Bank of Canada and the launch of Build Canada Homes could provide a modest lift to residential construction and housing-infrastructure in late 2025. However, weaker pre-sales and regional disparities — especially in Ontario and British Columbia — signal that the road to sustained recovery remains uneven.

This week, the Bank of Canada reduced its key interest rate by 25 basis points to 2.25% on Wednesday, while indicating it could pause further rate cuts if the economy performs in line with its latest projections.

“This was our second straight cut, and reflects ongoing weakness in the economy and contained inflationary pressures,” said Bank of Canada governor Tiff Macklem in prepared remarks.

CCA stated it will continue to monitor the effects of tariff regimes, input prices, and procurement reforms on member businesses and advocate for evidence-based policy solutions that support economic growth through construction.

“We are building Canada, together,” added Gilbert.