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February 3, 2025

Industry Update: U.S. Tariffs and Their Impact on Construction

The recently announced tariffs on construction materials are expected to have significant implications for our industry, leading to increased costs, supply chain delays, and contractual challenges. As businesses across Vancouver Island prepare for these changes, it is essential to take proactive steps to mitigate financial and operational risks.

What This Means for the Industry

These tariffs will likely result in higher material costs, which may disrupt supply chains and create challenges in meeting project timelines and budgets. Contractors, suppliers, and industry stakeholders must be prepared to navigate these uncertainties effectively.

VICA, alongside the British Columbia Construction Association (BCCA) and the Canadian Construction Association (CCA), is actively monitoring the situation and advocating for fair and sustainable solutions. In the meantime, we strongly encourage our members to take immediate steps to safeguard their projects and contracts.

Key Strategies to Protect Your Business

To minimize risk exposure, contractors should:

  • Use Standardized Contracts – CCDC contracts, such as CCDC 2 (Stipulated Price Contract), CCDC 5A/5B (Construction Management Contracts), and CCDC 14 (Design-Build Contract), provide clear risk allocation and dispute mitigation.
  • Include Price Escalation Clauses – Ensure that contracts account for unexpected material cost increases. CCDC documents include provisions for cash allowances and change directives that help manage volatility.
  • Negotiate Material Price Adjustments – Work with legal advisors to include clauses that allow for adjustments based on market conditions.
  • Secure Supply Chain Agreements – Where possible, establish long-term supplier contracts or explore alternative sourcing options to stabilize pricing.
  • Review Force Majeure & Delay Provisions – Ensure that contracts offer reasonable relief for project delays caused by trade disruptions.
  • Communicate Clearly with Clients & Owners – Set realistic expectations early regarding costs and timelines to prevent disputes and maintain strong client relationships.

BCCA has advised: Do not bid or sign contracts without clear duty provisions. Given the uncertainty surrounding supply chain stability, it is essential to review contract terms thoroughly and seek legal counsel before proceeding with new agreements.

Industry Survey – We Need Your Input

To gain a deeper understanding of how these tariffs are impacting construction businesses across the province, BCCA will be launching an industry survey in the coming days. The insights gathered will help shape advocacy efforts at both the provincial and national levels.

We strongly encourage all industry members to participate in the survey. Your feedback is critical in ensuring that policy recommendations reflect the realities faced by businesses on Vancouver Island. Watch for the survey link in your inbox soon.

VICA remains committed to advocating for fair procurement practices and providing our members with the resources they need to navigate these challenges. We will continue to share updates and best practices as more information becomes available. If you have any questions or concerns, please do not hesitate to reach out.

Stay informed. Stay prepared. Stay connected.