You priced your project in the spring. By last week, those numbers had shifted and not by a small margin. The shell costs have climbed noticeably.
Most blame tariffs and stop there. But saying “tariffs” isn’t actionable. Three distinct steel tariff regimes are in effect, each working differently, and only one directly affects quotes. To manage costs, you need to pinpoint which regime is driving your increases. Without that clarity, you’re absorbing hidden costs.
Here’s a simplified explanation of what’s happening, how it impacts your budget, and where you can take control.
Three Tariffs, One Supply Chain
The term “steel tariff” can be misleading. Three separate systems are currently driving costs:
U.S. Section 232 Tariff
A 50% tariff applies to steel entering the U.S. (up from 25% in June 2025).
Steel products, not raw steel, carry a 25% tariff applied to the total customs value.
Canada’s prior exemption was revoked, meaning Canadian steel is now treated like imports from other countries.
Canada’s Counter-Tariffs
Canada applies surtaxes of 15%, 25%, or 50% on $27.6 billion worth of U.S. goods, including steel and iron, which mostly fall under the 50% tier.
Key points:
Items with U.S. origin under CUSMA rules are not exempt.
No pre-implementation exemptions exist except for goods in transit by September 8, 2026.
Canada’s Offshore Steel Quota
Independent from U.S. policies, offshore steel entering Canada faces quotas, with a 50% surtax for volumes exceeding these limits.
Quotas were reduced further as of June 2026 and extend until mid-2027.
And there’s a fourth factor: currency risk. Projects quoted in U.S. dollars carry exchange rate exposure from the signing date to delivery.
Where the Tariff Hits: Not the Building, but the Steel
Tariffs attach to steel as it crosses borders. These costs are added upstream, sometimes multiple times, before showing up in the final “structural steel” line item in your budget.
The critical question isn’t whether tariffs apply to your building, but how many borders the steel crossed and who paid the tariff each time. For example:
– Offshore steel fabricated in the U.S., then shipped to Canada, crosses two tariff regimes.
– Locally sourced steel fabricated in Ontario crosses no borders.
Same building on paper, but drastically different costs and risk exposures.
It’s important to understand these tariffs are still evolving. Rates doubled, quotas were restructured, and counter-tariff lists were revised multiple times in 2026. A shorter, border-free supply chain isn’t just cheaper, it’s less exposed to future policy changes.
Tariff Costs and Your Pro Forma
Franklin Street’s team estimates a 5% increase in construction costs due to tariffs, though the actual impact depends on materials and sourcing.
Let’s break it down for a single-storey, 60,000-square-foot facility with 2.5 inches of roof insulation:
– Steel package costs: $20 per square foot ($1.2 million total).
– Installation: $10–$15 per square foot, bringing total costs to $1.8–$2.1 million.
The tariff impact is concentrated in the $1.2 million steel package, where a 5% increase equals $60,000. It isn’t in the install. Labour and equipment don’t cross a border.
Sixty thousand dollars might not end a project, but it could quietly eat up your contingency fund. With construction financing rates at 7%–9%, these added costs multiply over time, especially in multi-phase developments.
This is why some developers are delaying builds, focusing instead on land and entitlements while waiting for a clearer economic picture. It’s a cautious approach, but it assumes clarity will come. A better option is to treat tariff exposure as a procurement challenge, not an uncontrollable variable.
Five Questions to Reduce Risk
Two quotes for steel buildings can look similar on paper but carry vastly different risks. Here are five questions to ask every bidder:
Where is the steel fabricated, and where does it ship from?
Every border crossing adds tariff exposure. Know the journey.
Is the quote in Canadian or U.S. dollars, and who carries exchange rate risk?
A U.S. dollar quote shifts currency fluctuation risks onto you.
How long is the price guaranteed, and what triggers escalation?
Insist on a clear escalation clause. Vague terms like “material increases” are red flags.
Who is the importer of record, and who pays for tariff reclassifications?
Tariff disputes often occur post-shipment. Confirm liability upfront.
What happens if rules change mid-project?
The past two years prove this isn’t hypothetical. If your bidder can’t answer these questions confidently, think twice.
MetalCor: A Clear Answer to Question One
MetalCor manufactures in London, Ontario, entirely in-house. From design to delivery, we control every step, eliminating unnecessary supply chain complexity.
Our steel components are fabricated in our facility, not purchased from third parties. All buildings are engineered to Canadian codes and conditions. We are CSA A660 certified, with PE-stamped drawings for all Canadian provinces.
For Canadian developers, this means your building package travels directly from us to your site. No border crossings.
While global steel prices fluctuate, our short supply chain minimizes exposure to tariff shifts. In an unpredictable market, that’s real savings. We won’t tell you that makes us immune to steel prices. Nobody is. Global steel pricing moves for reasons that have nothing to do with trade policy, and when it moves, it reaches everybody. What we will tell you is that a shorter supply chain with fewer crossings is a smaller target, and in a policy environment that has changed direction three times in eighteen months, that’s worth real money.
With 10 years of experience, we’ve seen developers succeed by asking hard questions about supply chains before signing contracts, not after encountering surprise costs.
Before Your Next Quote
Tariffs won’t stabilize into a simple number. Plan for uncertainty.
Ask the five questions. Get escalation clauses in writing. Know your supply chain. These steps will protect your budget better than any forecast of next year’s rates.
If you want a transparent, detailed quote for your self-storage facility, call 1-844-481-8881 or request a quote online. We’ll walk you through where every component of your building comes from.
