What you need to know about Manitoba’s rising construction costs

Article from Volume 12, Issue Number 3, 2025

What you need to know about Manitoba’s rising construction costs

By Omar Khan | Other articles by Omar Khan | Feature

Manitoba has bucked the national decline in construction activity, showing year-over-year growth led by commercial investments. Residential investment is also expected to rebound this year after several years of declines due to high interest rates.

Across Canada, construction activity in 2025 reflects a general slowdown. Residential building output declined roughly 3 per cent in 2024 nationally, yet construction costs continue to rise due to several factors. These rising costs directly affect your building’s replacement value — the basis for insurance coverage. Since this is often the largest line item in a condo’s budget, accurate and current cost data is essential for sound financial planning and insurance adequacy.

Construction costs in Manitoba are among the fastest rising in the country, surpassing even Toronto and Vancouver. This is driven by Winnipeg’s strong population growth, high housing demand, major public infrastructure projects and tariffs on key materials. These pressures strain labour and material supplies, while evolving building codes and climate resilience requirements add further cost and complexity to new construction and reconstruction.

Projections for 2025 estimate cost increases of 2 to 5 per cent for residential reconstruction and 2 to 4 per cent for non-residential, with first-quarter data already trending toward the higher end of these ranges.

Tariff uncertainty

In early 2025, the U.S. imposed 25 per cent tariffs on Canadian steel and aluminum, prompting Canada to respond with reciprocal tariffs on nearly $30 billion in U.S. goods, including construction materials. For Manitoba, these changes could lead to a 3.7 per cent increase in core building material prices — such as steel, aluminum, concrete and softwood — according to the Canadian Mortgage and Housing Corporation. The full impact of tariffs takes time to move through the supply chain, creating pricing uncertainty. As a result, some suppliers are scaling back orders or minimizing inventory to manage risk.

Manitoba may be particularly vulnerable, relying as it does on the U.S. for many goods that other parts of Canada produce domestically. A reliable appraiser will closely monitor these changes to ensure costs reflect the broader market reality, helping boards make informed decisions based on long-term trends.

Labour shortages and wage growth

Labour remains one of the biggest cost drivers in construction. Manitoba is facing a skilled labour shortage, with approximately 9,100 workers expected to retire from 2023 to 2033. Only about 10,200 new workers are expected to enter the field, leaving a shortfall that must be filled from outside the province.

Across Canada, age growth is projected at 4.13 per cent in 2025, higher than most other sectors. Labour already accounts for 20 to 40 per cent of total project costs. To stay on track, developers need to prioritize recruitment strategies, apprenticeships, and inclusive hiring practices.

Impact of natural disasters

Catastrophic weather events across Canada caused more than $8 billion in insured damages in 2024, tripling the previous year. Reconstruction demand now exceeds supply nationally, driving up costs by straining already limited labour and material markets, while local events such as extreme flooding further stretch construction capacity across the province.

As insurers grow cautious due to increased losses, they are responding with stricter coverage terms and more detailed appraisal requirements. Up-to-date appraisals based on real-time market data are becoming more critical for ensuring proper coverage and maintaining insurer confidence.

Sector insights

The first quarter saw a 10.7 per cent decline in total permit values compared with the same period in 2024. Institutional and industrial permits dropped sharply, while residential and commercial sectors posted year-over-year gains.

Meanwhile, major infrastructure projects are propping up construction activity. The North End Sewage Treatment Plant upgrade ($2.34 billion) and the Winnipeg Road Revitalization Program ($1 billion over six years) are driving demand for labour and materials, intensifying competition and elevating costs — particularly for residential projects.

Risk mitigation strategies for condos

In today’s volatile construction market, condo boards and property managers can protect their communities through preventative maintenance, climate resilience planning and updated reserve fund studies. Most importantly, keeping insurance appraisals current ensures proper coverage, avoids costly co-insurance penalties and provides financial clarity.

Manitoba’s Condo Act requires regular appraisals, but annual updates are considered best practice to keep pace with cost fluctuations. From 2017 to 2025, construction costs rose 63 per cent, far outpacing general inflation at 25 per cent. This underscores the need for a qualified appraisal expert to deliver accurate, reliable valuations that protect your property in the event of a loss.

Omar Khan is Normac’s manager, business development. He is a regular speaker and supporter of CCI chapters across the country and has worked in property management, construction and appraisal industries for more than 10 years.

Go Back