The cost of building new homes in Canada rose 0.8% in the third quarter of 2026, Statistics Canada reported on October 29, 2026, in its building construction price indexes release. That followed a 0.6% increase in the second quarter. Year over year, residential construction costs across the 15 census metropolitan areas (CMAs) measured were up 2.7%. The index is not seasonally adjusted.
- Residential construction costs: +0.8% in Q3 2026 and +2.7% from Q3 2025 (15-CMA composite).
- Non-residential construction costs: +1.2% in Q3 and +4.3% year over year, including extraordinary revisions.
- Largest quarterly residential increases: Québec City CMA (+2.3%) and Regina (+1.8%). Smallest: Moncton (+0.6%), Toronto (+0.4%) and Vancouver (+0.2%).
- Year over year, residential costs rose 9.2% in the Québec City CMA and 8.6% in Montréal, compared with 0.3% in Toronto, 0.6% in Vancouver and 0.7% in Calgary, according to Table 1 of the release.
What is driving the increase
Builders told Statistics Canada that higher material, fuel, transportation and labour expenses pushed costs up during the quarter. Builders on the east coast and in the Prairies also reported capacity pressures and higher wages for skilled trades and subcontractors. Statistics Canada noted that additional Canadian retaliatory tariffs on U.S. products took effect on September 8, 2026, and that tariffs of 15% to 50% added to cost pressures on materials and equipment. Among residential trade divisions, metal fabrications (+2.4%), structural steel framing (+2.0%) and earthwork (+2.0%) rose the most.
The index measures what contractors charge to build a set of model buildings, including materials, labour, equipment, overhead and profit. It covers single-detached houses, townhouses and low- and high-rise apartments. It excludes land, design, land development, sales taxes and real estate fees, so it is not a measure of home prices.
Who is affected
Our interpretation: the people most exposed are those paying a builder directly: owner-builders, buyers of custom homes and small builders working on infill or multiplex projects, particularly in Quebec and parts of the Prairies and Atlantic Canada, where costs rose fastest. In Toronto, Vancouver and Calgary, which together carry a large share of the index weight, cost growth over the past year was much slower. Buyers of resale homes are not directly affected, though higher building costs can influence how quickly new supply is added.
What to check next
- If you are planning a build, ask your contractor how the contract handles material price changes and what contingency is built into the budget. Construction loans are usually advanced in draws as work is completed, so a cost overrun may need to be covered from your own funds.
- A construction mortgage broker can explain how draw schedules and holdbacks work, and you can compare construction lenders by region.
- Lenders typically order a construction appraisal to set the value used for each draw. Terms vary by lender.
- Planning a renovation rather than a new build? The purchase plus improvements calculator shows how renovation costs can be added to a purchase mortgage.
Sources
- Statistics Canada, The Daily, Building construction price indexes, third quarter 2026, 2026-10-29. Accessed 2026-10-30.
- Statistics Canada, Table 1: Building construction price indexes, 2026-10-29. Accessed 2026-10-30.
General information only, not financial advice. Figures are as published by Statistics Canada on October 29, 2026, for the third quarter of 2026, and are not seasonally adjusted.
