Planning an electrical upgrade, renovation, or new build in Ontario? You should pay close attention to the ongoing trade dynamics between the US and Canada. Tariffs, which are taxes on imported goods, can significantly impact the cost of materials and potentially inflate your project budget. Let’s break down how these tariffs could affect your residential electrical project.
The Interconnected Electrical Market: From Your Bathroom Renovation in Burlington to the World Stage
The US and Canada have a highly integrated electrical market. Many common electrical components used in Ontario homes, from wiring and circuit breakers, to lighting fixtures and appliances, are often manufactured in the US. This close relationship means that any trade barriers, like tariffs, can ripple through the supply chain and affect prices.
Where Tariffs Come Into Play:
Tariffs are generally imposed on specific categories of goods. Depending on the current trade agreements and any ongoing trade disputes — such as the one that’s currently playing out between the US and Canada — certain electrical materials, fixtures, and appliances might be subject to import taxes when crossing the border. On February 4th, Refrigerators (various types), Dishwashers, Luminaires and lighting fittings, and several other types of electrical appliances made the Canadian Department of Finance’s list, potentially being subject to a 25% import tariff when arriving at the Canadian border from the US. Although these tariffs received a last minute delay, they are still pending for the beginning of March. These tariffs would then be passed down the line, from manufacturers to distributors, retailers, and ultimately, the consumer – you. The effects of these “potential” tariffs have already begun to affect some markets, and thus some product prices.
How Tariffs Impact Your Project:
Here’s how tariffs can translate to higher costs for your electrical project:
- Increased Material Costs: The most direct impact is on the price of the electrical materials themselves. If a significant portion of your required components are subject to tariffs, you can expect to pay more for them. This could include everything from copper wiring and electrical panels to light switches and outlets. For example, if Canada were to impose a tariff on copper or copper based products like wiring, this would have a significant impact on the residential and commercial electrical landscape. As the US makes up over half of all of Canada’s refined copper imports, any tariff on copper imports would result in significant price increases for certain products and appliances.
- Potential for Price Volatility: Trade relations can be fluid. Changes in tariffs can happen quickly, leading to price fluctuations in the market. With the current administration in the US, there is no predictability or guarantees, as can be seen with the recent announcement of tariffs on steel and aluminum. This makes budgeting for your project more challenging, as the prices you see today might not be the prices you pay tomorrow. If you’re considering a home renovation or commercial electrical project in Milton, Burlington, or beyond, we’re happy to go over your options with you. This includes our current pricing, as well as how we think pricing for various services could change in the near future as these trade disputes progress. Feel free to get in touch with us if you have questions.
- Delays in Procurement: Tariffs can sometimes lead to delays in receiving materials. Increased border scrutiny or changes in supply chains can slow down the delivery of electrical components, potentially pushing back your project timeline and adding to labour costs.
- Impact on Contractor Pricing: Electrical contractors are also affected by rising material costs. They may need to adjust their quotes to reflect these increases, which ultimately translates to a higher overall project cost for you. At Lorion, we have every intention of keeping the cost of our services as affordable as possible for our customers across Milton, Oakville, and Burlington.
- Substitution with Canadian Products: One potential outcome is an increased focus on sourcing electrical components from Canadian manufacturers. While this could support local businesses, it might also mean limited availability or potentially higher prices for certain specialized items.
- Moving Away from the US: With the ever revolving door of threats of tariffs from the US, Canada, as well as many other nations, are exploring new trading opportunities. This could potentially lead to Canada importing some of the goods required for electrical projects from other countries, rather than relying so heavily on the US. On its face, this could be beneficial, but could eventually lead to complications, (such as further supply or logistical issues), as these transitions occur.
What Can You Do?
While you can’t control international trade policy, you can take steps to mitigate the potential impact of tariffs on your electrical project:
- Plan Ahead: Start your project planning early. This gives you more time to research pricing, compare quotes, and potentially find alternative sourcing options. Give us a call or send us an email — we’re here to help.
- Get Multiple Quotes: Obtaining multiple quotes will provide you with a better understanding of current market prices and help you identify any significant discrepancies. At the very least, acquiring multiple quotes will help ensure you have a strong grasp on the budget required to undertake your project.
- Discuss Material Sourcing: Talk to your contractor about where they source their materials. Ask if they anticipate any price increases due to tariffs and if they have any alternative sourcing options.
- Consider Canadian Products: Explore the possibility of using Canadian-made electrical components or appliances. This could help you avoid tariffs and support local businesses.
- Be Flexible: Be prepared to adjust your budget and timeline if necessary. The electrical market can be unpredictable, so it’s important to have some flexibility built into your plans.
Staying Informed:
Keeping up-to-date on the latest trade news and tariff changes can be beneficial. However, it can sometimes be difficult to comprehend exactly how and what products will be affected. That is why consulting with industry professionals, such as electrical contractors and suppliers, can also provide valuable insights into the current market conditions.
The impact of tariffs on residential electrical projects in Ontario is a complex issue. While it’s difficult to predict the future of trade relations, being aware of the potential effects and taking proactive steps can help you manage your project costs and minimize any disruptions.
