Renovation Prices, Third Quarter: London Up 5.1%, Toronto Up 2.0%

What the index says

Nobody budgets a renovation from a price index. But if you are about to borrow against your home to pay for one, it is the only published measure of whether the quote in your hand is about to age badly.

Statistics Canada released the Residential Renovation Price Index for the third quarter of 2026 on 12 November, through The Daily. The index tracks the quarterly change in what renovation contractors charge to complete a range of residential projects, across eight project groups and 15 census metropolitan areas. The agency notes that contractors' prices include materials, labour, equipment, overhead and profit, and exclude sales taxes and design costs.

Two of those 15 areas are in our patch. On the index's 2023 base of 100, here is where the third quarter leaves them, calculated from Statistics Canada's table 18-10-0286-01:

• London — 111.6, up 1.6% on the quarter and 5.1% on the year. Contractor pricing is 11.6% above where it sat in 2023.
• Toronto — 106.6, up 1.0% on the quarter and 2.0% on the year, and 6.6% above 2023.
• Ontario as a whole — 106.8, up 2.4% on the year.
• The 15-area composite — 109.3, up 1.1% on the quarter and 3.1% on the year.

The gap between the two Ontario cities is the thing worth noticing. A London homeowner planning work has watched contractor pricing climb more than twice as fast over the past year as a Toronto homeowner, and nearly twice as fast since 2023. That is not what most people assume about the two markets.

It is not the same story in every room

The composite number hides a wide spread, because the index breaks down by project group. In Toronto, the third-quarter year-over-year moves look like this:

• Heating and air conditioning equipment — up 10.9% on the year, and 6.8% in the third quarter alone. It now sits 20.0% above 2023, by far the fastest-moving group in the city.
• Bathroom remodel — up 1.7%.
• Kitchen remodel — up 1.4%.
• Interior additions or remodels — up 1.4%.
• Finishing a basement — up 0.5%.
• Exterior additions or improvements — essentially flat, down 0.1%.

London's spread runs differently again: finishing a basement is up 4.3% on the year and 12.6% above 2023, kitchen remodels are up 3.2%, and bathrooms are up 2.0%.

A caution about reading any of this too precisely. The index is not seasonally adjusted, previous quarters get revised, and Statistics Canada is explicit that the prices reported by contractors may not match the contracts that were actually accepted in a bidding process. It tells you the direction of travel in a city, not what your builder will charge you.

Why this matters when the work is financed

If you are paying cash, a price index is background reading. If you are borrowing, it has a direct consequence, because of how lenders size improvement financing.

When improvements are financed into a purchase — the Purchase Plus Improvements structure we set out on our improvements page — the lender lends against the value of the home once the work is done, and the amount advanced for the work is based on the quotes you submit. The money is released by your lawyer after the work is finished and inspected, not before. Which means:

• The quote is the ceiling. If the final invoice comes in above the quote the lender approved, the difference is yours to find in cash. Nobody re-opens the file for an extra $4,000.
• You carry the cost first. Because funds are advanced on completion, the contractor has to be paid or carried until then. Pricing that has moved since the quote was written lands on that gap.
• An old quote is a risk, not a saving. In a city where contractor pricing is rising 5% a year, a quote from the spring is a different number by the time the keys change hands.

The same logic runs through a refinance to fund work on a home you already own, and through the Blueprint Build Plan, where draws are paid out against inspected progress and the lender holds back 15% of the build money until the final inspection. In every one of those structures, the number you agreed with a contractor months ago is the number the financing is built on.

The practical response is not complicated: get quotes refreshed before the file is submitted, ask the contractor how long the price holds, and put a contingency into the budget rather than into your hopes. On a $60,000 project in a market moving at 5% a year, a quote that has sat for six months is roughly $1,500 light before anybody has found anything behind a wall.

What to do with this before you commit

Five things, in the order they usually matter.

• Date your quotes. Know how old each one is and whether the price is still honoured in writing.
• Put the mechanical work first in the plan. Heating and cooling is the category moving fastest in Toronto; it is also the one with the least discretion about timing.
• Build a contingency into the borrowed amount, not beside it. A cushion you have to fund in cash at completion is not a cushion.
• Check the finished value, not the spend. Improvement financing is sized against the as-complete value. Our piece on as-complete appraisals sets out how that number is arrived at.
• Run the payment before the project. The calculators will show what adding the work to the mortgage does to the monthly payment over the amortization you are actually on.

And one framing point. A renovation financed into a mortgage is paid for over decades, so a 5% swing in contractor pricing is not the thing that decides whether the project is sensible. What decides it is whether the finished home is the one you want to live in and whether the payment works on your income. The index is useful for sizing the budget honestly — not for talking yourself into or out of the work.