Price index for residential and non-residential construction in Canada 2017-2023

Between 2017 and 2023, the construction price of residential buildings in Canada has grown at a faster rate than that of commercial buildings in the country. The price of residential buildings was roughly 75 percent higher in the last quarter of 2023 than in 2017, which is the year when the index base was set at 100. Nevertheless, that only considers the cost of buildings in 11 selected metropolitan areas in Canada. Toronto was by far the metropolitan region with the highest construction costs in Canada.

What determines construction costs?

The growth rate of the construction price of different types of buildings tends to follow similar trends to some extent. For example, those price growth rates in Canada were moderate in 2020 for most types of buildings, but then they rose considerably in the two following years. However, those figures show a lot of disparity, with the cost of building a home growing much faster than that of schools or offices. This might be because the construction costs depend on elements such as the location, materials, and complexity of the building, which tend to be quite different for each type of building. 

Lumber building materials in Canada

In 2022, Canada was the world’s second-largest exporter of wood building materials such as veneer sheets, parquet flooring, particleboard, laminated wood, and builders’ joinery and carpentry. Forestry, logging, and processing wood into ready-to-use materials are important industries in the Canadian economy. High price growth rates of building materials impact negatively the construction industry as their activities become more expensive. However, the forestry and logging industry benefited a lot from the cost of lumber rising in the past years.