The U.S. decision to put 25 per cent tariffs on construction materials is expected to have significant implications for the construction industry, leading to increased costs, supply chain delays, and contractual challenges.
Despite the 30-day pause on the pending tariffs, contractors, suppliers, and industry stakeholders must be prepared to navigate these uncertainties effectively to mitigate financial and operational risks.
Construction associations are actively monitoring the situation and advocating for fair and sustainable solutions. The most important advice for construction professionals is to carefully read and fully understand contracts.
Vancouver Island Construction Association, along with BCCA and the Canadian Construction Association, is strongly encouraging members to take immediate steps to safeguard their projects and contracts.
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.
