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What the US Midterms Mean for Canada's Economy and Your Home
By Paige Kirkdene
Americans voted on November 3, and the first question most Canadians had was simple: does this end the trade war? The short answer is no. The US tariffs on Canadian steel, cars and lumber were still in place the morning after.
But something real did shift. And for anyone in Canada with a mortgage, a home to sell, or plans to buy, what happens in the next 30 days could matter more than the election itself. On this week's RealtyChatter, Gary McGowan broke down what the US midterms mean for Canada, what changed, what didn't, and what to watch.
Why the US midterms matter to Canada's economy
About 70% of Canadian exports go south of the border. When the balance of power shifts in Washington, it shows up here in three places: jobs, prices, and eventually the housing market.
The headline result: Democrats took control of both the House and the Senate. Several long-held Republican seats flipped, including Maine, where Senator Susan Collins lost. Maine matters more to Canada than most people realize. It borders New Brunswick and trades heavily with Atlantic Canada.
Do the tariffs on Canada go away? Not yet
This is the part a lot of people are getting wrong. Congress can pass a bill to roll tariffs back, but the President can veto it. He still has that power, and he has already said he will use it.
Overriding a veto takes two-thirds of both chambers. The numbers aren't there. So anyone saying the trade war ends tomorrow because of this election is getting ahead of themselves.
The US tariffs still hitting Canada
50% on steel, aluminum and copper
25% on autos and parts
25% on certain furniture and cabinetry
Extra duties on softwood lumber
These tariffs sit under trade laws that only the President controls, so the election doesn't touch them directly. Now think about where those jobs actually are: Hamilton, Windsor, Oshawa, Alliston, and mill towns across BC. Those are real communities with real homeowners, and their confidence moves local markets.
How lumber tariffs hit new home prices
Lumber is a big one for housing. When lumber costs go up, so does the cost of building a home, and builders pass that cost on to the buyer.
Gary flagged a ripple effect worth watching. Over the last several months, new home construction and pre-construction numbers have dropped sharply. Local buyers are choosing not to buy brand-new builds. They want something tangible, something they can move into today. At the same time, some builders have gone into receivership or creditor protection. For buyers, that is a real risk to weigh on any pre-construction purchase, and a reason resale homes are getting a second look.
Why Canada has a stronger hand in trade talks
Now the good news. Experts say this result gives Canada a stronger position. Asa McKercher of St. Francis Xavier University put it simply: it "only strengthens Canada's negotiating hand."
Here's the part people miss. Any future change to CUSMA, the free trade deal between Canada, the US and Mexico, has to go through Congress. So the people now in control on Capitol Hill have a real say in what a long-term deal looks like. And because the US declined to renew CUSMA in July, the agreement now gets reviewed every year.
The risk: why tariff relief isn't automatic
There's a flip side. Right before the vote, some Canadian forestry products and farm equipment received tariff exemptions, reportedly to help Senator Collins in Maine. She lost. Donald Wright of the University of New Brunswick warns those exemptions could be reversed.
There's also the money angle. Former US diplomat Scotty Greenwood points out that tariffs bring in revenue, and with US deficits at record highs, there is less appetite to give that money up. Gary's read: tariffs have become a new income stream for the US government, and he doesn't see Washington giving it up quickly.
Is a Canada-US trade deal close?
Talks broke down in August and restarted in late October. Prime Minister Mark Carney summed up where things stand: "They're asking less and they're offering more, but we're not quite there." The President told Fox News a "great deal" with Canada is imminent.
Energy looks like a big piece of it: diesel, oil exports, maybe even Keystone XL coming back. A real deal would matter more to Canada's economy than the election result itself.
What to watch in the next 30 days
The federal budget, November 5. It is expected to be built around trading more with countries other than the US.
Formal Canada-US trade talks, expected to continue this week.
The CUSMA review, now an annual event.
The Bank of Canada rate decision, December 9. This is the one that hits your mortgage most directly.
That last date deserves attention. On October 28, the Bank of Canada raised its policy rate from 2.25% to 2.5%, its first hike since 2023. If you have a variable-rate mortgage, a home equity line of credit, or a business line of credit, your rate already went up. December 9 tells us whether that was a one-off or the start of a trend.
What the midterms mean for the Canadian housing market
Buyers don't buy homes based on election results. They buy when they feel secure in their jobs and confident about their payments.
That is why a trade deal matters so much for real estate. A deal means steadier jobs in towns that depend on autos, steel and lumber. Steadier jobs bring confident buyers back. When buyers feel confused or nervous about their payments, they do nothing, and the market stalls.
The numbers show it. Royal LePage's Q3 survey found the Greater Toronto Area aggregate home price down 3.7% year over year to $1,073,100, with buyers holding back over tariffs and rate fears. Brokers are reporting finance conditions and price reductions coming back, which means buyers currently have more negotiating room than they have had in a while.
So over the next few months, keep your eye on three things: the trade deal, the federal budget, and the December rate call. Those are the real drivers heading into 2027.
What does this mean for your home?
Every local market reacts differently. If you're in the GTA and want to know what your home is worth right now, Gary will walk you through it one-on-one.
Homeowners: get your home value at garyamcg.com/value
Buyers: see move-in-ready deals at garyamcg.com/deals
Questions: email Gary at homes@garyamcgowan.com
Sources: BNN Bloomberg / CTV News (Nov 4, 2026), The Canadian Press (Nov 4, 2026), CP24 (Nov 3, 2026), Yahoo News Canada (Nov 3, 2026), Newsweek (Nov 2, 2026), The Receipts (Sept 10, 2026), Royal LePage Q3 2026 House Price Survey via Canadian Mortgage Professional (Oct 15, 2026), Bank of Canada.
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