“Renovation costs are up” is true but not actionable. The increases in 2026 are concentrated in identifiable categories, and knowing which ones lets you make substitutions that preserve the project rather than shrinking it.
Where the increases actually landed
Material costs are running above pre-2020 levels because of continuing supply-chain pressure and tariffs on imported building products. The specific categories named are lumber, roofing materials and imported tile, with roofing tariffs ranging from 10% to 60%.
Tariff exposure also covers cabinets, steel and appliances.
Look at that list against a typical kitchen budget and the picture becomes clear: cabinets and appliances are usually the two largest line items, and both are exposed.
What this means for substitution
Cabinets are the highest-leverage decision. Domestic manufacture, refacing existing boxes, or keeping the current layout to avoid new cabinetry all avoid the exposed category entirely. Refacing in particular can preserve most of the visual result at a fraction of the cost.
Appliances can be timed separately. There is no requirement to buy appliances during the renovation. Decoupling that purchase lets you shop sales rather than accept whatever is available on the contractor’s schedule.
Tile has domestic alternatives. Imported tile is named specifically; domestically produced options are not subject to the same exposure.
Roofing is harder to avoid. With tariffs up to 60%, this is the category with the least room to manoeuvre. If a roof is near end of life, the calculation is about timing rather than substitution.
What did not change
Labour is not tariff-exposed. Neither is design work, permitting, or the value of good project management.
This has a practical implication that runs against instinct: in a period when materials are expensive and labour is not, paying for better planning is relatively cheaper than it used to be. A design that avoids moving plumbing, or a scope that reuses existing structure, saves in the expensive category by spending in the cheaper one.
The costs people forget
In Ontario, 13% HST applies to both labour and materials on most residential renovations — over $52,000 on a $400,000 project. Permits typically run $400 to $2,000+.
Neither appears in a per-square-foot estimate, and both are unavoidable.
The practical sequence
Establish scope before getting quotes. Identify which line items sit in tariff-exposed categories. Decide where substitution preserves the outcome and where it compromises it. Then budget from the all-in figure including tax and permits.
The renovations that go badly in a high-material-cost environment are usually the ones that started with a number rather than a scope.
Sources
- Maserat Developments — Hidden Costs Guide
- Reno Quotes — Canada renovation cost guide 2026
- Lighthaus Built — 2026 Pricing Breakdown