Building construction costs rose again in the fourth quarter of 2025, but compared to the third quarter of the year, price increases are slowing.

Statistics Canada reports that residential building construction costs increased by 0.4% in the fourth quarter. That followed an increase of 0.6% in the third quarter. Non-residential building construction costs rose 0.5% in the fourth quarter, following a 0.7% increase in the previous quarter.

Year over year, construction costs for residential buildings in the 15-census metropolitan area (CMA) composite rose 3.0% in the fourth quarter, while non-residential building construction costs saw an increase of 4.1%.

With residential building starts declining across most of the country in the fourth quarter, partly reflecting seasonal factors, price pressures moderated, though prices remained elevated in part due to rising material prices.

While builders reported a decline in bidding activity, reflecting this market slowing, labour shortages and elevated wages continued to place further upward pressure on construction costs, particularly in the skilled trades.

Builders also reported challenges in sourcing suitable substitute materials for certain product groups, creating acute price pressures for certain products in the fourth quarter.

Residential building construction costs rose across most CMAs, with Québec (+2.1%) reporting the largest quarterly increase, followed by Montréal (+1.7%). Increases were also notable in Regina (+1.5%) and Saskatoon (+1.4%).

Calgary (-0.7%), Edmonton (-0.7%), and Vancouver (-0.3%) were the only CMAs to record declines in residential construction costs in the fourth quarter.

At the division level for residential building construction, the metal fabrications division (+1.7%) had the largest quarterly increase, followed by finishes (+1.3%) and heating, ventilation and air conditioning (+1.2%). In contrast, electrical (-0.7%), wood, plastics and composites (-0.6%), and concrete (-0.3%) recorded the lowest quarterly price movement.

London leads non-residential construction cost growth

Costs to construct non-residential buildings increased the most in London (+2.3%) in the fourth quarter, followed by Saskatoon (+1.3%). Moncton (+0.8%) and Ottawa (+0.6%), for their part, reported moderate growth. At the same time, Vancouver (-0.1%) saw the only decline and Victoria (0.0%) showed no growth in the fourth quarter.

At the composite level, non-residential building construction costs increased across most divisions measured, with the structural steel (+1.7%) and metal fabrications (+1.6%) divisions recording the largest increases. These divisions for metal materials continue to reflect the upward price pressure associated with import tariffs. While there was moderate growth across divisions, the electrical division (-1.7%) recorded the only decline.