Reasons behind rising costs of materials


 Ontario Construction Report staff writer

Here are some of the reasons materials costs are rising so rapidly:

  • An unprecedented demand caused by limited supply, especially for pressure-treated wood
  • Pandemic shutdowns in the lumber industry coupled with a mild winter which allowed residential construction to continue, combined to squeeze supply chains
  • Increased demand for home renovations as more people spend time at home.
  • Canadian lumber quantities exported to the United States may also factor into domestic shortages, according to the OHBA, adding it is still unclear how the recent drop in penalizing tariffs imposed in 2017 will pan out; the expected tariff costs are reported to have cost Canada’s soft lumber industry about $5 billion a year
  • The housing market in Canada and the US took off last summer (relatively at the same time) as the pandemic, which further accelerated the shortage of housing and pent-up demand that already existed. As a result of the pandemic, lumber mills in Canada and the US slowed production, but the housing market rebounded faster than the mills
  • Other issues include transportation woes, a shortage of wood fibre, as well as high demand and a lack of supply that drove up prices on both sides of the border, as well as in other developed countries experiencing similar housing booms.


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