Why Construction Costs Are Higher In Vancouver Than Toronto

Construction costs in Vancouver have surpassed those in Toronto, making it the most expensive city in Canada to build residential properties. According to Altus Group's 2025 Canadian Cost Guide, Vancouver's construction costs are higher across nearly all residential building types. For example, constructing a concrete high-rise between 13 and 39 storeys in Vancouver costs between $360 and $455 per square foot, while in Toronto, the range is approximately $300 to $400 per square foot .

Several factors contribute to Vancouver's elevated construction costs. One significant reason is the stringent building regulations in British Columbia. The province has implemented the BC Energy Step Code, which mandates higher energy efficiency standards. Additionally, new seismic requirements necessitate more robust building designs to withstand potential earthquakes. These regulations, while promoting safety and sustainability, increase construction complexity and expenses .

Labour shortages also play a crucial role. Vancouver faces a limited pool of skilled construction workers, leading to increased labour costs. The high demand for construction projects, coupled with a retiring workforce, exacerbates the issue. In some cases, tradespeople either decline projects or charge premium rates, further driving up costs .

Material costs have risen due to global supply chain disruptions and increased demand. The COVID-19 pandemic caused significant delays and shortages in building materials, leading to price volatility. Although some stability has returned, prices remain higher than pre-pandemic levels, impacting overall construction budgets .

Land availability and geography also influence construction expenses. Vancouver's limited land supply, constrained by mountains and the ocean, leads to higher land prices and necessitates more complex building designs to maximize space. This geographical limitation increases both land acquisition and construction costs .

In summary, Vancouver's higher construction costs compared to Toronto result from stricter building codes, labour shortages, increased material prices, and geographical constraints. These factors collectively make building in Vancouver more expensive, impacting housing affordability and development in the region.