The United States’ decision not to renew CUSMA in its current form has created a new reality for Canada. While the agreement remains in force until 2036, the introduction of annual reviews over the next decade adds a level of uncertainty that businesses, investors, lenders, and developers can no longer ignore.
From my perspective as a commercial real estate broker working with institutional investors, developers, and private owners across Québec, uncertainty is often more damaging than bad news. Markets can adjust to challenges, but they struggle when the rules of the game may change every year.
Uncertainty Delays Investment
Commercial real estate is built on long-term decisions. Whether someone is acquiring a multi-residential portfolio, developing industrial space, or purchasing land for future development, investors need confidence that the economic environment will remain relatively stable.
Annual trade reviews introduce another layer of risk into every investment decision. Developers planning projects that will take three to five years to complete now have another major variable to consider before moving forward.
Many investors may simply choose to wait until there is greater clarity.
Construction Costs Remain a Major Concern
One of the biggest issues continues to be construction costs.
Canada’s construction industry relies heavily on materials such as steel, aluminum, and lumber. While CUSMA currently protects much of this cross-border trade, annual negotiations create ongoing uncertainty around future pricing.
Even the possibility of higher tariffs or supply disruptions can increase costs as manufacturers, suppliers, and contractors build additional risk into their pricing.
For developers, higher construction costs often mean projects become financially unfeasible, resulting in fewer new developments breaking ground.
Higher Interest Rates for Longer
Trade uncertainty also influences financial markets.
When uncertainty persists, central banks tend to be more cautious. Rather than aggressively lowering interest rates, policymakers often choose to wait until economic conditions become clearer.
At the same time, bond markets price in additional risk, which can keep long-term borrowing costs elevated. For commercial real estate investors, this affects financing costs, property values, and overall investment returns.
While many had hoped for a more predictable interest rate environment heading into the second half of 2026, ongoing trade uncertainty may delay that recovery.
Employment Drives Real Estate
Commercial real estate has always followed employment.
Industries such as manufacturing, automotive, forestry, logistics, and energy all depend heavily on trade with the United States. If businesses become hesitant to invest or expand, hiring slows.
A weaker labour market eventually affects every segment of real estate—from industrial facilities and office space to retail properties and housing demand.
When employers delay expansion, developers delay projects, lenders become more conservative, and transaction volume slows across the market.
Multi-Residential Still Has Strong Fundamentals
Despite the uncertainty, I remain optimistic about Canada’s long-term multi-residential market.
Population growth, immigration, housing shortages, and limited new supply continue to support rental demand across most major markets.
Ironically, higher construction costs and slower development may further restrict new supply, strengthening the fundamentals of existing apartment assets over time.
Investors who focus on high-quality properties with strong locations and stable cash flow will likely continue to perform well despite short-term volatility.
The Importance of Long-Term Thinking
Every market experiences periods of uncertainty.
Successful investors are not those who try to predict every political decision—they are the ones who focus on long-term fundamentals.
Canada continues to benefit from population growth, a stable banking system, strong institutional capital, and an ongoing need for housing and industrial infrastructure.
These fundamentals have not changed.
Final Thoughts
The United States’ decision to move toward annual CUSMA reviews does not signal the end of North American trade. However, it does mean that uncertainty will remain part of the investment landscape for years to come.
For commercial real estate investors, this reinforces the importance of disciplined underwriting, conservative financing, and careful market selection.
There will undoubtedly be periods of volatility ahead, but history has shown that uncertainty also creates opportunity. Investors who remain patient, well-capitalized, and focused on long-term value will be in the strongest position to benefit when confidence returns.