🥊 Round two

Good morning! 🔥 Sharing is caring, even when it comes to building heat. The University of Toronto is expanding Canada’s largest urban geoexchange system, a deep underground thermal battery that captures and stores excess heat from buildings in summer to warm them in winter. With a goal to cut emissions by over 50% by 2027, the system will connect 33 campus buildings, reducing natural gas reliance by more than 25%.

⏰ Today’s read: 5 ½ minutes

MARKETS

Economy:  Canada’s senior housing sector is experiencing a strong rebound driven by the country’s aging population and constrained supply, with rising construction costs limiting new developments. Despite setbacks during the COVID-19 pandemic, occupancy rates are recovering and demand is projected to grow significantly, requiring the addition of 200,000 senior housing suites in the next decade. Publicly traded senior housing companies have seen impressive stock gains, outperforming other real estate sectors.

NEED TO KNOW

The week's headlines

🏠 False starts: Ontario fell short of its 2024 housing target, recording 94,753 housing starts—well below the 125,000 needed to stay on track for the premier’s goal of 1.5 million homes by 2031, even after counting student housing, retirement suites, and long-term care beds. Critics blame the government for resisting province-wide zoning reforms like fourplex approvals, while industry leaders call for fee reductions and federal tax incentives to spur building.

🔋Not dead: Lyten, a U.S.-based lithium-sulfur battery maker, has announced plans to acquire Northvolt’s battery plants and intellectual property in Sweden, Germany, and is now pursuing the Northvolt Six battery factory project in Quebec. Following Northvolt’s recent bankruptcy, Lyten is negotiating with government officials and local stakeholders regarding the $7-billion Quebec facility, while provincial officials emphasize careful review and regulatory oversight of the potential purchase.

🔥 Heating up: Marten Falls First Nation has sued to stop Ontario and Canada from advancing mining and development in the Ring of Fire, citing past environmental damage and new laws that allow projects to bypass protections and Indigenous consent. Despite government claims of consultation, the First Nation and others say these laws threaten their rights and lands, prompting a broader legal challenge.

📖 Corridor study: Ontario has launched a feasibility study for a new energy and economic corridor spanning from Alberta to Southern Ontario, potentially extending to a deep-sea port on James Bay. The project envisions Canadian-built oil and gas pipelines, a new or expanded refinery, and aims to boost domestic energy security, job creation, and export capacity while reducing reliance on foreign infrastructure.

THE BIG STORY

Round 2: Construction faces new trade war fallout 

The Aug. 1 trade deadline has passed, but the impact is only beginning to show. With U.S. President Donald Trump imposing a fresh round of tariffs on Canadian goods, the construction industry is being pulled deeper into the crosshairs of a worsening trade war. Lumber, steel and other goods are all are facing steep duties. The result? Rising material costs, paused projects, and tens of thousands of job losses in a sector already stretched thin.

Employment dips: In July, Canada shed 40,800 jobs. Construction accounted for more than half of that loss, with 22,000 jobs vanishing in just one month. While other sectors managed to tread water, construction’s exposure to material volatility made it especially vulnerable to the latest tariff wave.

The new normal: Despite the economic turbulence, Ottawa has avoided dramatic tariff retaliation. Prime Minister Mark Carney announced a $1.2 billion aid package for Canada’s lumber industry, including $700 million in loan guarantees and $500 million for market diversification and product innovation. The government is also exploring further relief options for other impacted sectors. 

Business confidence shaken: Advisory firms are warning clients to prepare for longer-term instability. Grant Thornton’s latest industry brief describes the tariff environment as “destabilizing” and cautions that many firms may pause capital investments or shift supply chains until U.S. policy becomes clearer. Developers, meanwhile, are now baking in higher contingency costs — not only for materials but also for legal and compliance exposure.

An uncertain path forward: Even as Canadian exporters lean on USMCA protections, and some sectors like energy remain largely untouched, the construction industry finds itself largely unshielded from the trade war’s effects. While some hoped the Aug. 1 deadline would trigger resolution, it’s become clear that there is no fast fix — and few signs of de-escalation.

As Trade Minister Dominic LeBlanc put it: “We’re encouraged by the conversations… but we’re not yet where we need to go to get the deal that’s in the best interest of the two economies.

PROJECT SPOTLIGHT

New heights

The M3 condo building in Mississauga has topped out at 83 storeys and 258 metres, making it Canada’s tallest building outside downtown Toronto and the seventh tallest nationwide. Owned by Rogers Real Estate Development and structurally engineered by RJC Engineers, M3 features nearly 900 residential units and seven levels of underground parking, with construction started in 2020 and completion expected next year. Notably, it includes a massive 750-tonne tuned mass damper to reduce wind sway—important as the tower can move up to two feet in extreme conditions.

PROJECT UPDATES

New recreation centre under construction in Dawson City, Yukon

Toronto now has 9 supertall skyscrapers in the pipeline

Sens, NCC have land sale deal for LeBreton Flats arena

Demolition begins for Lakeshore East GO expansion properties

Shovels are in the ground for Winnipeg’s St. James Civic Centre

The Site C dam is now fully operational

Premier Ford vows to build Highway 401 tunnel

WHAT WE’RE TALKING ABOUT

VIDEO: 🪜 The potential and controversy around single egress stairs

REPORT: 🚘 1 underground stall in Metro Vancouver costs $137K to build

READ: 🏗️ Italy pitches world’s largest suspension bridge

VIDEO: 🔨 What construction was like in the 1960s

READ: 🚧 Lessons learned from a modular company’s collapse

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Here’s to a great rest of the week!

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