Non-residential building costs in Canada rose 1.2% in the third quarter of 2026 and 4.3% over the past year, according to Statistics Canada’s latest Building Construction Price Index. Structural steel and elevators led the increase, and the release lands just as new retaliatory tariffs on U.S. steel and aluminum start to bite. If your budget still escalates at the rate of consumer inflation, it is falling behind.
What happened
Statistics Canada released its third-quarter construction price data on October 29. Across the 15 cities it tracks, non-residential costs rose 1.2% from the second quarter, after a 1.4% gain in the quarter before. Residential costs rose 0.8%, up from 0.6%. Year over year, non-residential costs are up 4.3% and residential costs 2.7%. This release also carried an extended revision: the first-quarter non-residential index was revised up 0.2%.
By trade, structural steel framing (+3.3%), conveying equipment such as elevators and escalators (+3.1%) and metal fabrications (+2.1%) saw the biggest non-residential increases. Electrical rose the least, at 0.4%. Builders pointed to higher costs for materials, fuel, transportation and labour, and some, mainly on the east coast and in the Prairies, reported capacity pressure and wage increases for skilled trades and subcontractors.
View the data
| Division | Q3 2026 change (%) |
|---|---|
| Structural steel framing | +3.3 |
| Conveying equipment | +3.1 |
| Metal fabrications | +2.1 |
| Communications | +0.5 |
| Fire suppression | +0.5 |
| Electrical | +0.4 |
The release also flags the policy backdrop. Retaliatory tariffs on U.S. products took effect on September 8, 2026, at rates from 15% to 50%, with the 50% rate applying to certain steel and aluminum products.
What it means for owners
Building costs are outrunning general inflation. Consumer prices rose 3.1% in September. Non-residential construction costs are up 4.3% over the year, and a 1.2% quarter, if it repeated for four quarters, works out to about 4.9% a year. Escalation allowances pegged to CPI or to a round 3% are likely light for institutional, commercial and industrial work tendering in 2027.
The steel-heavy scopes are the exposure. The three fastest-rising divisions are steel frame, elevators and miscellaneous metals: the packages that sit on the critical path of most commercial and institutional buildings, and that often carry long lead times. The tariffs took effect only in the last weeks of the quarter, so this index may not yet show their full effect. Owners should plan for these packages to keep rising, not to level off.
Location matters more than the national number. Non-residential costs rose 2.4% in Québec City and Regina and 2.0% in Montréal, but only 0.7% in Ottawa and Halifax. In Toronto, residential costs rose just 0.4%, one of the smallest gains in the country. Here is the contrarian read: a soft GTA residential market can free up some trades and soften some bids, but it does not lower the price of steel, elevators or imported equipment. Owners should expect some competition on labour-heavy packages and none on material-heavy ones.
View the data
| City | Q3 2026 change (%) |
|---|---|
| Québec | +2.4 |
| Regina | +2.4 |
| Montréal | +2.0 |
| 15-city composite | +1.2 |
| Ottawa | +0.7 |
| Halifax | +0.7 |
Revisions are a reminder to check your baseline. If you indexed a contract or a budget to the first-quarter figure, it has moved. Index-based escalation clauses should name the series, the base period and how revisions are handled.
What to do now
- Re-price escalation by trade, not as one number. Apply higher rates to structural steel, metal fabrications and conveying equipment, and lower rates to labour-heavy trades. Our escalation allowance guide shows how.
- Buy steel and elevators early. Where design allows, release mill orders, steel shop drawings and elevator contracts ahead of the main package, or pre-purchase them as the owner. See our guide to long-lead equipment procurement.
- Ask bidders where their steel comes from. Origin now drives price. Require a breakdown of tariff-exposed materials in tenders so you can see the risk, and compare it with the Buy Canadian steel rules.
- Write revisions into your escalation clause. Name the Statistics Canada table, the city and building type, the base quarter and whether revised or first-published figures apply. Our post on escalation clauses covers thresholds and caps.
- Use your local index. A Toronto or Ottawa budget should not escalate at a Québec City rate, or the reverse. Pull the city and building-type series that match your project.
Go deeper: Toronto condo prices against construction costs, Toronto housing starts in September 2026 and the Toronto home price forecast for 2027 and 2028.
FAQ
How much did construction costs rise in Canada in Q3 2026?
Statistics Canada reported non-residential building costs up 1.2% from the second quarter and 4.3% year over year, and residential costs up 0.8% in the quarter and 2.7% year over year, across 15 cities.
Which construction trades rose fastest in Q3 2026?
For non-residential buildings, structural steel framing rose 3.3%, conveying equipment such as elevators 3.1% and metal fabrications 2.1% in the quarter. Electrical rose the least, at 0.4%.
The bottom line
Construction costs are still rising faster than consumer prices, and the steel-heavy packages are rising fastest. Owners who escalate by trade and by city, and who lock steel and elevators early, will hold their budgets better than those using one national number. Want a second look at your escalation assumptions? Book a 30-minute call, or track the numbers in our GTA Construction Cost Monitor.
Sources: Statistics Canada, The Daily: Building construction price indexes, third quarter 2026 (October 29, 2026); Statistics Canada, Building construction price indexes: announcement (October 21, 2026); Statistics Canada, Table 18-10-0289-01; MoneySense, September CPI of 3.1% (October 28, 2026). Cover photo: Simon Gibson on Unsplash (Unsplash Licence). The 4.9% annualized figure is our calculation from the quarterly change.