Hard costs for construction and infrastructure projects in Canada are stabilizing, with overall increases through 2024 and early 2025 now more in line with broader inflation, according to Altus Group’s latest cost guide.

The guide draws from data on more than 6,200 development projects spanning about 1.5 million square feet and valued at more than $521 billion.

Among the key findings, Altus reports that slowing construction activity is helping to ease pricing pressures. However, Toronto and Ottawa stand out as two markets where construction costs have actually declined, largely due to reduced building activity and lower demand.

“The big question is whether that stability will hold,” said Colin Doran, head of development advisory for the Americas at Altus. “With shifting trade policies, upcoming building code changes, and labour negotiations on the horizon, developers are facing a new wave of complexity—and that’s on top of already high construction costs. Staying agile and tapping into real-time data will be key to navigating what’s ahead.”

Despite the recent slowdown in cost increases, Altus warns that several unfolding issues could impact pricing in the months ahead. Trade tensions with the United States and the possibility of new tariffs could push costs higher, while ongoing labour negotiations and anticipated building code revisions could further complicate budgeting and forecasting.

“The threat of new tariffs could throw a wrench into the 2025 cost outlook,” added Peter Norman, a vice-president and economic strategist at Altus. “Even if the immediate impact is muted, it’s still a wild card. It really depends on what goods are affected, how long tariffs stick around, and whether there’s any retaliation—all of which could drive costs even higher.”

As the industry navigates these uncertainties, Altus emphasizes that access to real-time data and flexible planning will be essential for developers looking to stay ahead in an evolving market.

Photo: Altus Group

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