Canadian Tariffs Contractors Materials: What to Watch and How to Protect Your Margins
Your distributor’s latest price sheet may tell you more about U.S.-Canada trade policy than any headline. Since late summer, the two countries have layered new tariffs on top of existing ones, and many apply to two materials that home service contractors buy constantly: aluminum and softwood lumber.
From 2021 through 2024, Canada supplied 56% of U.S. aluminum imports, according to the U.S. Geological Survey. On the lumber side, Canada provides nearly a quarter of all softwood lumber used in the U.S., according to the National Association of Home Builders (NAHB). Aluminum appears in HVAC coils, gutters, flashing, and siding, while lumber drives costs for remodeling, roofing, restoration, and deck work.
Here’s the short version for your business: expect cost increases on some products, unevenly distributed across items, along with shorter pricing windows from your suppliers. The bigger threat is timing. A supplier price increase that lands after you’ve sold the job comes straight out of your margin.
Canadian Tariffs at a Glance
Each material has its own tariff, and some products have more than one.
Material | Extra tariff at the border today | Who feels it most | What to watch |
Aluminum products | 25% to 50%, plus a second 50% on some products since September 2026 | HVAC and exterior contractors, plus electrical | Distributor notices on which SKUs are affected |
Residential HVAC equipment on the government’s list | 15% through the end of 2027 | HVAC contractors | Whether the equipment you buy qualifies for the lower rate |
Softwood lumber | About 45% | Remodelers, roofers, restoration, and deck contractors | An October ruling that could bring it to about 35% |
The importer pays these duties at the border, and that importer is usually your manufacturer or distributor. The cost reaches you through their pricing, even if you never buy from a Canadian company. Canada has imposed tariffs of its own on U.S. goods, keeping the whole dispute unsettled.
What a Border Tariff Does to Your Installed Price
A tariff is assessed based on the cost the importer pays for the imported product. When a manufacturer imports a coil and assembles the unit here, the tariff applies to the coil. When a finished unit crosses the border, the tariff applies to the unit’s value. Either way, your labor and overhead are excluded from that calculation, so the increase on a finished job comes out well below the headline rate. Suppliers also decide how much of the increase to pass along and when, and many sell through older inventory first.
That’s why a flat tariff surcharge on every ticket misses the mark. It will overcharge some customers and underprice other jobs. Price each job based on the verified cost your supplier quotes today.
Aluminum Runs Straight Through the HVAC Shop
Canada is the world’s fourth-largest aluminum producer and second-largest exporter, according to Natural Resources Canada, and it shipped C$13.8 billion of aluminum to the United States in 2025.
HVAC contractors have the most direct exposure. A typical split system pairs aluminum coils with copper tubing inside a steel cabinet. The Air Conditioning Contractors of America (ACCA) notes that most HVACR equipment relies on these metals, whether it’s assembled here or abroad. ACCA has also compiled manufacturer statements indicating that tariff costs will be reflected in equipment pricing.
Residential equipment got a break in June when a presidential proclamation reduced the metals tariff on a list of residential HVAC equipment and components to 15% through the end of 2027. HARDI, the HVACR distribution trade association, cautions that the lower rate depends on each product’s exact tariff classification, so two similar products can end up with different rates.
September brought a new wrinkle. A second proclamation imposed an additional 50% tariff on certain Canadian aluminum and metal products as of September 15, on top of the metals tariff. U.S. Customs and Border Protection’s list includes carve-outs, so ask your distributor which of your SKUs, if any, are affected.
Exterior and electrical contractors also buy a lot of aluminum for gutters, downspouts, flashing, siding, conduit, and enclosures. Exposure varies by manufacturer because a finished product may use imported or domestic metal, or a mix of both.
Lumber Carries the Heaviest Stack
Canadian softwood lumber has been caught in a trade dispute for decades. Most Canadian mills pay about 35% in long-running U.S. duties, according to the Government of British Columbia. A separate 10% lumber tariff added in October 2025, per Global Affairs Canada, brings the total to about 45%, the same figure cited by NAHB.
Some relief may be on the way. Preliminary numbers from a Commerce Department review would cut the long-running duties to about 25% for most mills, according to NAHB, bringing the total to about 35%. Global Affairs Canada expects the final ruling by October 2026. Current rates remain in place until then, and the 10% lumber tariff remains in place regardless.
Retail prices respond to more than tariffs. NAHB’s framing lumber price tracker showed prices on September 25 down 2.8% from a month earlier and up 4.5% from a year earlier. Mill output, housing demand, weather, and dealer inventory all push that number around, and yards often sell through older stock before new costs show up. The lag works in both directions. If duties drop in October, the savings could take a while to reach your invoice.
Where the Pressure Shows Up in Your Business
Most contractors will feel the effects of tariffs through everyday operating decisions.
Gross margin: A supplier price increase between the signed proposal and the purchase order comes straight out of job profit.
Pricing windows: Distributors may honor quotes for shorter periods, and ACCA suggests that contractors shorten their quote-validity periods from the traditional 30 to 60 days.
Cash flow: Higher equipment and material costs tie up more cash in deposits and inventory.
Customer decisions: A higher ticket price can push some homeowners toward a repair or a smaller scope. ACCA recommends discussing financing options early.
Service mix: Emergency repairs and maintenance may be steadier than discretionary replacements and remodels.
Your exposure depends on your trade and your supplier mix. An HVAC company may see increases concentrated in a few equipment lines, while a roofing contractor could face increases in lumber and metal on the same job.
Protect the Margin You Already Sold
Start with your suppliers: ask which SKUs are affected and when new pricing takes effect. While you have them on the phone, find out how long they’ll honor current quotes and which approved alternatives they can supply if a product becomes scarce, so a rushed substitution doesn’t cause warranty or installation headaches later.
Your own paperwork deserves a look next. Shorter quote-validity periods make sense for volatile categories, and projects with a delayed start may need material-escalation language reviewed by your attorney. ACCA recommends both steps.
The price book needs the same attention. Equipment in your warehouse was purchased at an older price, so update your rates to reflect current replacement cost. Service Nation’s Flat Rate Pricing Calculator can help you rebuild with today’s numbers.
On inventory, buy selectively in advance. Pre-buying fast-moving equipment can protect availability heading into a busy season, while a warehouse full of slow movers ties up cash and risks obsolescence.
Tracking gross margin by service line lets you see aluminum-heavy and lumber-heavy work separately. Check it job by job once costs close out, because a full board can hide an estimating problem until the monthly financials arrive.
Comfort advisors and technicians need a clear explanation for customers. Something like this works: some supplier costs are changing, and we price each job based on today's material costs. The proposal still includes the same installation standards and warranty support.
Finally, follow manufacturer notices and the tariff trackers from ACCA and HARDI. They report classification changes in far more detail than general news coverage.
What to Watch This Fall
Plan for persistent, product-specific cost pressures through the rest of 2026. For lumber buyers, the next major milestone is the final lumber duty ruling, expected by October. HVAC contractors should monitor how the new September aluminum tariff affects manufacturer and distributor price sheets and remember that the reduced 15% residential HVAC rate is temporary.
Some effects will appear later as distributors sell through older inventory and manufacturers adjust their sourcing. Rates and product lists can change with a single proclamation, as the September action showed, so treat any supplier price more than a few weeks old as provisional.
Price from Today’s Costs
Trade policy will keep shifting this fall, and nobody can say exactly what your next price sheet will show. Your response can stay steady, starting with how quickly a supplier’s price increase moves from purchasing to your estimates.
Assign clear ownership of supplier updates and price-book changes to a single person. Keep quote windows short for volatile categories, and review gross margin on every job once costs are in. Contractors who price from current replacement cost give themselves room to absorb the next increase while still maintaining the margin they worked to earn.
Build Your Pricing Game Plan with 30,000+ Contractors in Your Corner
Supplier costs are shifting across the trades, and it helps to compare notes with peers reviewing the same price sheets. Service Nation connects you with a network of more than 30,000 member contractors and brings pricing tools and business benchmarking together in one place. Explore Service Nation membership and get your pricing ready before the next supplier adjustment takes effect.
Frequently Asked Questions About Canadian Tariffs
How Are Canadian Tariffs Affecting Contractors’ Material Costs?
Canadian tariffs can increase the cost of materials that contractors purchase through manufacturers and distributors. Aluminum and softwood lumber are two major areas of concern.
Which Contractor Materials Are Most Affected By Canadian Tariffs?
Aluminum and softwood lumber are key materials to watch. Aluminum affects HVAC, exterior, and electrical contractors. Lumber affects remodelers, roofers, restoration companies, and deck contractors.
How Do Canadian Tariffs Affect Contractor Pricing?
Tariff-related costs can reach contractors through higher supplier prices. If costs rise after you sell a job, the increase can come directly out of your margin. Price each job using the supplier's current verified cost.
Should Contractors Add A Tariff Surcharge To Every Job?
A flat tariff surcharge can overcharge some customers while underpricing other jobs. Material exposure varies by product and supplier. Price each job using the current cost your supplier provides.
How Can Contractors Protect Their Margins From Material Price Increases?
Ask suppliers which products are affected and when new pricing takes effect. Review quote-validity periods and material-escalation language. Update your price book and track gross margin by service line.
Should Contractors Shorten Their Quote Windows?
Shorter quote windows can help contractors manage changing material costs. ACCA suggests shortening traditional 30- to 60-day quote-validity periods when pricing becomes volatile.
How Should HVAC Contractors Handle Canadian Aluminum Tariffs?
HVAC contractors should monitor manufacturer and distributor price sheets. Ask which products are affected by current tariffs. Exact tariff classifications can cause different rates for similar products.
What Should Contractors Watch For With Canadian Lumber Tariffs?
Watch for changes to the long-running lumber duties and the separate lumber tariff. Changes may take time to reach contractor invoices because suppliers can sell older inventory first.