Ottawa’s construction sector faces mounting challenges as new steel and aluminum tariffs significantly impact city contracts. Local developers and officials are scrambling to find solutions amid rising costs that threaten project timelines across the capital region.
Last week, city officials confirmed that several major infrastructure projects now face budget overruns between 8-12% due to the tariff situation. The ByWard Market revitalization project and three community center expansions are among those affected most severely.
“We’re caught between impossible choices,” explains Daniel Lafleur, president of the Ottawa Construction Association. “Either we absorb costs that weren’t factored into original bids, or we pass them along to the city, which ultimately affects taxpayers.”
The ripple effects extend beyond just materials pricing. According to data from the City of Ottawa’s procurement office, approximately 22 local contracts valued at over $450 million now require budget reassessments. This represents nearly 30% of the city’s planned infrastructure spending for the fiscal year.
City Councillor Sharon Miller points to creative solutions emerging from the crisis. “We’re exploring alternative materials where feasible and renegotiating some contract terms to provide relief to our industry partners while protecting taxpayer interests,” Miller told me during our conversation at City Hall yesterday.
One promising approach gaining traction involves strategic phasing of projects. Rather than cancelling initiatives outright, the city now plans to extend completion timelines for certain projects, allowing material costs to potentially stabilize over time.
The Ottawa Chamber of Commerce has established a special task force to address these challenges. Their newly released report recommends several measures including bulk purchasing agreements across multiple projects and exploring Canadian-produced alternatives to traditionally imported materials.
“What we’re seeing is unprecedented cooperation between sectors,” notes Catherine Williams, Chamber president. “Local suppliers are working directly with contractors to find cost efficiencies that weren’t previously considered.”
For smaller contractors like Riverside Construction, the situation remains precarious. Owner Michael Desjardins describes the difficult position many businesses face: “We’ve already purchased materials for projects that were bid months ago. There’s no mechanism to recover those increased costs unless contracts are renegotiated.”
The issue extends beyond just construction. The city’s procurement of transit vehicles, playground equipment, and even some IT infrastructure contains components affected by current trade tensions. A comprehensive audit is underway to identify all vulnerable contracts.
City Manager Eleanor Paquette confirms that Ottawa is not alone in this challenge. “We’re coordinating with Toronto, Montreal and other major Canadian municipalities to develop consistent approaches to contract modifications. There’s power in presenting unified solutions.”
One silver lining may be increased interest in local manufacturing. Kanata-based Steel Solutions has reported a 40% increase in inquiries about domestically produced structural components that would avoid tariff impacts altogether.
“Sometimes economic disruption creates unexpected opportunities,” observes Dr. Martin Singh, economics professor at Carleton University. “We may see a resurgence in local manufacturing capabilities that had previously been outsourced to international suppliers.”
For everyday Ottawa residents, the most visible impacts will likely be seen in project completion delays. The planned pedestrian bridge connecting LeBreton Flats to Centretown, originally slated for completion next summer, now shows a revised timeline extending into early 2025.
Community advocates express concern about these delays. “Every postponed infrastructure project represents lost opportunities for our neighborhoods,” says Jenna Thompson of the Ottawa Community Development Network. “We understand the financial realities, but there are real social costs to these extended timelines.”
As officials work toward solutions, transparency remains crucial. The city has committed to monthly public updates on contract modifications and budget implications. Citizens can track these changes through the municipal website’s new “Project Impact” portal.
Looking ahead, industry experts suggest this disruption may fundamentally change how Ottawa approaches future contracts. Risk-sharing provisions, material cost fluctuation clauses
