Tariffs and catastrophic events in 2025 have muted impact on rebuild prices

New data from risk information provider, Verisk shows that tariffs are having a relatively small impact on rebuilding prices in the 86 markets nationally that it tracks. At the same time, fewer catastrophic (CAT) events are putting pressure on resources, but labour market shortages do continue to have a moderate impact on reconstruction costs.

The research presented in Verisk’s first quarter 2026 Canada report, Reconstruction Cost Analysis, based on data collected by 300 licensed contractors across 86 cities, also shows the highest recorded year-over-year increases in Quebec and Saskatchewan while New Brunswick and Prince Edward Island contractors report the lowest. Quebec and Saskatchewan contractors report 4.4 per cent higher reconstruction costs. New Brunswick and Prince Edward Island showed the lowest growth rates of 2.6 per cent and 2.7 per cent, respectively.

The report also notes that 2,000 square foot spaces saw the largest year-over-year increase in building costs, around 4.4 per cent. The 5,000 square food model rose the least at 2.4 per cent. “Overall, this quarter’s results indicate a stabilization of inflationary pressures, driven by reduced impacts from major external events,” the report states.

Tariffs

“Current estimates indicate a less than one per cent effect across our five residential models,” it adds. “This is consistent with our September 2025 analysis which projected an uplift of under two per cent.” They add that tariff activity remains fluid but the overall impact on core residential rebuilding costs continues to be minimal and stable.

CAT events

Fewer large scale CAT events occurred in 2025 when compared with the 2024 season, and none generated widespread community damage or prolonged reconstruction surges. They add that consequently, typical CAT-driven pressures were muted in 2025.

Labour shortages

Ongoing labour shortages are extending rebuilding timelines, impacting living expenses, storage costs and increasingly driving the need for re-inspections. They add that scarcity of skilled labour continues to drive higher wages and labour premiums.

Component costs

The national year-over-year increase in component costs came in at 3.8 per cent. Roofing rose 4.9 per cent, aluminum siding rose 4.6 per cent, followed by bathroom costs which rose 4.2 per cent. Kitchen and basement rebuilding costs came in 3.1 per cent and 2.4 per cent higher, respectively.