TLDR: Tariffs on U.S. building products took effect September 8, 2026, and CGC applies surcharges from October 1. We priced the drywall for two live Toronto additions on September 18 and asked our supplier to check every product code on them against the surcharge list. The tariff cost on both orders came back at zero. The number that will actually move sits in a different letter sent three days earlier: an ordinary price increase of 9 to 10 percent on gypsum board, also starting October 1. On a $12,800 drywall material line that is $813 to $1,179, or roughly one to two tenths of one percent of a $650,000 addition.
What the letter actually says
On September 11, CGC sent its Canadian customers a letter setting out tariff surcharges that start October 1. The largest number in it is 25 percent.
That number is real. It is also not about your house.
The 25 percent applies to drywall suspension systems, the metal grids that hold up suspended ceilings in offices, schools and retail space. We have never bought one for a residential addition. The surcharge table runs to fourteen lines and eight of them are ceiling products.
The lines that could touch a house are narrower than that number suggests. Fifty-four inch panels are 7 percent in Western Canada only. Two by two repair panels are 12 percent. Mold Tough VHI and Abuse Resistant panels are 7 percent, and those are heavy duty grades used in institutional work, not the moisture resistant board that goes in a bathroom. Any other wallboard is 7 percent, and only if it ships from a U.S. facility.
Read that last condition again, because it decides everything.
What most homeowners get wrong about a tariff announcement
The mistake is assuming a manufacturer's notice describes what lands on your invoice. It describes what the manufacturer will charge under certain conditions. Whether those conditions apply to the material going into your house is a separate question, and only the distributor who ships the product can answer it.
We did the careful version of the wrong thing first. We took the CGC letter, applied it line by line to a real drywall order, and assumed the worst on the sourcing question we could not answer. That produced an estimate of about 6 percent, roughly $744 on one of our additions.
Then we sent our supplier the fourteen product codes on our two quotes and asked which ones ship from a U.S. plant. The answer was none of them, so the 7 percent wallboard line does not apply to us at all. We also asked whether the standard moisture resistant board we put in bathrooms and basements is caught by the Mold Tough VHI line. It is not.
Our careful reading was wrong by the entire amount. The surcharge on both orders is zero.
The increase that will actually reach your budget
The second letter is the one that matters.
Three days before the tariff letter, our supplier circulated a second notice: the ordinary annual price increase schedule. It lists CGC raising all gypsum board 9 to 10 percent on October 1, performance board 9 to 25 percent, and Certainteed interior finishing 10 to 15 percent.
That increase was coming anyway, tariffs or no tariffs, and it is larger than the surcharge in the letter.
On the Toronto addition, the drywall material line in the approved budget is $12,800 before tax, covering 10,442 square feet of board. If the full 9 to 10 percent lands, that line rises $813 to $1,179. On the Scarborough project the material line is $11,991, and the range is $722 to $990.
Our supplier is holding its own price list until at least November, so the quotes we have in hand are good now. They also offered to work on locking in pricing for orders placed in November, which is worth more to our clients than any analysis of the surcharge table.
What five real orders actually show
We compared the same product codes across every drywall order we placed this year, five documents from April to September.
The price we pay for standard board, moisture resistant board, fire rated board, corner bead and tape is identical today to what we paid in April. Not close. Identical. That was still true on September 18, ten days after the tariffs took effect. One board product did move: a tile backer we use in bathrooms, up 1.5 percent back in July.
Two prices fell. Fifty-four inch board dropped 14.6 percent, and joint compound dropped 13.4 percent, which means the one product our supplier expects to rise in October is cheaper today than when we bought it for our Dawes Road addition in July, an order of 8,704 square feet of board. One price rose: a box of screws went up ten dollars.
This is the second time in recent memory that a material price scare has landed in the middle of people's projects, and the pattern held both times. Our post on lumber prices in Toronto covers the last one.
How we handle this on a fixed price contract
Our contracts are fixed price, and they also state that any commodity increase or decrease is credited or debited to the client. Both things are true at once, and homeowners are often surprised by the second one.
In practice we do not go quiet when something like this happens. We tell our clients a commodity increase has been announced, we quantify it against the approved pricing in their budget, and we tell them whether it affects them.
A lot of the time our budgets are set up so they can absorb modest commodity increases between when the contract is signed and when the materials are ordered. On the Scarborough addition the drywall came in comfortably under the approved line. On the Toronto project it landed within a rounding error of it. One has room to spare and one does not, and a client on a fixed price contract is entitled to know which one they are. Budgets have limits, and pretending otherwise is how a builder ends up with an awkward conversation in month five.
Should you wait, or start?
News like this should not deter anyone from starting a home building project. In the grand scheme of what you will pay, this is pennies on the dollar, and a fraction of one percent is not a reason to delay a build that takes the better part of a year to design and permit.
What you should be focused on is adjusting your design to find the larger levers. Square footage, foundation work, how many walls you move, whether the roof line changes, how much of the existing structure stays. Those decisions move tens of thousands of dollars. Board pricing moves hundreds. The builder you want is the one who can show you which line of your budget moved, and by how much.
What to ask any builder who tells you prices went up
Save these questions. They work on us too.
Ask which specific product, which supplier, and which document. A builder passing through a real increase can name all three in about fifteen seconds. Ask to see the quantity and unit rate in your approved budget, then ask what that same line costs now. A commodity clause should produce an arithmetic answer, not a shrug. Ask whether the increase hits material already ordered or only what is still to come, because with this surcharge the shipping date is the test, not the purchase order date.
A bad answer sounds like a general reference to tariffs, supply chain conditions or market pressure, with no product, no percentage and no paperwork. If nobody can show you the letter, there may not be one.
Key Takeaways
The 25 percent surcharge, the largest number in the letter, applies to commercial ceiling suspension systems, not to a residential addition.
The 7 percent wallboard surcharge applies only to product shipping from a U.S. facility. Our supplier confirmed in writing that none of our fourteen product codes is affected, so the tariff cost on two live orders is zero.
Standard moisture resistant board is not caught. Only the VHI and Abuse Resistant grades are named.
The increase that will reach budgets is an ordinary list price rise of 9 to 10 percent on gypsum board from October 1, worth $813 to $1,179 on a $12,800 drywall material line.
Across five orders from April to September, every board price we pay is unchanged. Two fell, one box of screws rose ten dollars.
Shipping date decides whether a surcharge applies, not order date.
Frequently Asked Questions
Does the drywall tariff affect a Toronto renovation?
Almost certainly not. The surcharge applies to 54 inch panels in Western Canada, two by two repair panels, two heavy duty Mold Tough grades, commercial ceiling grid, and any wallboard shipping from a U.S. facility. On two live Toronto additions priced in September, our supplier confirmed that none of the products we buy falls into any of those categories, so the tariff cost was zero on both.
Should you delay a project because of material price increases?
No. The increase that is real, a 9 to 10 percent rise on gypsum board, works out to roughly one to two tenths of one percent of a typical addition budget. Design decisions move far more money than board pricing does. Delaying to avoid a few hundred dollars usually costs more in carrying time than it saves.
If material prices rise after you sign a fixed price contract, who pays?
Read the contract. Ours is fixed price with a clause stating that commodity increases or decreases are credited or debited to the client, which obliges us to tell you when one happens and to show you the effect on your approved budget. Ask any builder to show you that clause before you sign, and ask what they did the last time a commodity moved.
Talk it through with us
If you are planning an addition or a custom home and want to know what current material pricing does to your budget, book a call and we will walk through the real numbers on a project like yours. If the budget itself is still the question, our Design and Feasibility Sprint answers it before you commit to anything.