A Canadian infrastructure investment boom

Mark Carney’s first year as prime minister has delivered the most ambitious infrastructure commitment Canada has seen in over a decade. The 2025 federal budget and creation of the Major Projects Office aim to catalyze $1 trillion in total investment to counter trade volatility from U.S. tariff policies while expanding the domestic economy.

The strategy mirrors Canada’s last major infrastructure push. During the 2008 financial crisis, the Stephen Harper government deployed tens of billions in spending that drove civil construction starts to record levels in the early 2010s. If current commitments translate to actual projects, Canada could potentially see similar levels of infrastructure investment in the coming years.

The pretext

Canada’s infrastructure investment playbook was written across three administrations in the 2000s. The Jean Chrétien and Paul Martin governments established the foundation through programs like the Municipal Rural Infrastructure Fund, creation of the Department of Infrastructure, full rebate of Goods and Services taxes for municipalities, and federal fuel tax sharing.

Harper continued these initiatives after taking office in 2006, committing over $37 billion for infrastructure development in the 2007 budget alone. The global recession prompted additional federal response, including $4 billion in new infrastructure funding and the establishment of a Green Infrastructure Fund.

During the peak period, civil construction starts averaged $46.5 billion annually from 2011 through 2014. For comparison, the most recent four-year period from 2022 through 2025 averaged just $32.2 billion annually, highlighting how significant the early 2010s investment was.

The objective behind this spending extended beyond immediate economic stimulus. Infrastructure investment aimed to diversify Canada’s economy and reduce vulnerability to economic downturns.

Tariffs drive new investment wave

The current government faces different circumstances but is pursuing similar objectives. In 2025, the United States imposed sweeping tariffs on Canada including a blanket 25 per cent levy alongside targeted duties on energy resources, minerals, aluminum and steel. Canada responded with reciprocal measures, though both countries have since removed or exempted portions of these tariffs.

Trade disruption provided the catalyst for aggressive domestic investment. Finance Minister François-Philippe Champagne framed Budget 2025 as “a plan to catalyze investments from provinces, territories, municipalities, Indigenous communities and the private sector.”

The budget did just that, providing significant federal funding promises to specific sectors. This includes $25 billion for housing, $30 billion for defense and security, $115 billion for major infrastructure and $110 billion to drive productivity and competitiveness over five years.

The scale of investment is generational comparable to the Harper-era response, with the newly created Major Projects Office tasked with expediting approval for developments under review. In just three months between September and November 2025, the office has already brought nearly $120 billion in projects under review.

What this means for the industry

Whether Canada reaches Harper-era construction levels will depend on execution. Federal funding promises create potential, but actual starts require co-ordination across federal, provincial and municipal governments alongside private investment.

For construction firms and civil contractors, the investment wave creates potential opportunity concentrated in infrastructure, housing and industrial projects tied to domestic capacity expansion. Firms positioned in these sectors could face surging demand if federal commitments reach projects.

Devin Bell is the associate economist at ConstructConnect, where he analyzes the construction economy.