How to Prepare for a U.S. Tariff War That Affects Your Renovation
A trade war with the United States may seem far removed from deciding whether to build a deck or add an extension to your home.
But if lumber is a target of U.S. tariffs, history suggests Canadian lumber prices can rise—thus affecting renovation decisions.
Lumber and Trade Wars
Canadian lumber has been caught in a U.S. trade dispute before. In 2017, the United States imposed countervailing and anti-dumping duties on certain Canadian softwood lumber products. The Government of Canada argued at the time that the duties would make homes, renovations and repairs more expensive.
Source: Government of Canada – Statement on U.S. Duties on Canadian Softwood Lumber
Canadian lumber prices subsequently rose substantially. Statistics Canada found that the average Canadian retail selling price for framing lumber was 34% higher in 2018 than in 2016. Wholesale framing-lumber prices increased 33% over the same period.
To be clear, the tariffs weren’t the only reason prices increased. Statistics Canada also pointed to growing U.S. housing demand, Canadian rail transportation constraints, wildfires and the mountain pine beetle.
So history doesn’t tell us that a new tariff will automatically cause lumber prices to rise 34% but it can contribute to lumber pricing pressure.
Source: Statistics Canada – Recent Trends in Wholesale and Retail Softwood Lumber Prices
Lumber Costs and Renovations?
Statistics Canada reported in 2025 that projects requiring significant amounts of wood were experiencing higher prices, which it attributed largely to rising commodity prices and uncertainty surrounding tariffs on key construction materials.
More importantly, contractors reported tariff-related uncertainty and delayed schedules, while Statistics Canada said consumers were delaying major purchases, including renovations, amid the uncertain economic outlook.
Source: Statistics Canada – Residential Renovation Price Index
Not every renovation will be affected equally.
Projects that require substantial amounts of wood—such as additions, decks, fences—are more exposed to lumber-price movements. The more lumber your renovation requires, the more important lumber prices may become to your project’s final cost.
Timing delays is another potential cost created by trade wars as companies search for alternative supply chains to avoid tariffs and suppliers hoard materials. Although outside the scope of this article, it should be noted that other construction material prices could also rise from tariffs, such as steel, aluminum, doors/windows.
How to Forecast Lumber Prices?
You don’t have to wait for lumber prices to rise – one indicator to watch is lumber futures. Futures prices represent market prices for lumber delivered in future contract months, so movements can provide an indication of what market participants are currently paying for future delivery. However, they aren’t a guarantee of what you will eventually pay.
Homeowners can also watch Statistics Canada’s producer and renovation price indexes and, importantly, announcements concerning new U.S. duties on Canadian lumber.
Lumber futures: CME Group – Lumber Futures
Industrial product price index
If you’re considering a lumber-intensive renovation, the answer isn’t necessarily to rush out stock up before prices rise. Instead, start by determining how sensitive your project actually is to lumber prices.
Get estimates earlier, ask your contractor how much of the quote represents lumber and other materials, and find out how long the quoted material prices are guaranteed. You can also ask whether materials can be purchased or prices locked in earlier in the project.
Most importantly, budget for renovation surprises. A project that barely fits your budget today could become considerably harder to finance if major input costs increase.
Financing Solutions
If you are planning to use your home equity to finance a renovation, consider building some extra room into your budget in case costs rise.
Ask your mortgage agent or lender and ask whether you could qualify for a higher loan amount if you need it. It doesn’t cost anything to ask, and knowing how much financing you have available can help you plan before the renovation begins.
Renovate sooner or wait — If lumber prices will rise, starting the project sooner may help.
Decide how to access the equity — Compare a mortgage refinance, HELOC or second mortgage based on the amount needed, interest cost and how quickly the money will be used.
Confirm the resulting value of your renovation — If a $100,000 renovation becomes $125,000 will you still generate value (home equity) above and beyond the costs.
Maybe break your existing mortgage? — If refinancing your mortgage is a better option then an additional line of credit, consider breaking your existing mortgage. If you refinance you will need to calculate the prepayment penalty and compare it to a new mortgage with more capital and a different mortgage rate.
