Canada’s construction industry is projected to expand by a modest 2.6% in real terms in 2026, supported by ongoing government infrastructure investment and a rebound in both public and private projects following the recent economic slowdown. Although high interest rates and global cost pressures will continue to weigh on growth, targeted federal programmes aimed at enhancing transit, social infrastructure and regional connectivity are expected to maintain demand across the sector.
Institutional construction is anticipated to record the strongest growth, rising by 3.4% in 2026. This will be driven by increased spending on schools, hospitals, community facilities and public buildings, reflecting consistent public sector investment to address long-standing gaps in essential services and infrastructure across provinces.
Trade tensions and evolving tariff policies are impacting construction costs. Canada is tightening tariff-rate quotas on imported steel by reducing allowances for non-FTA partners and imposing 25% global tariffs on selected steel derivative products. These measures are intended to support domestic producers and limit excess foreign supply but are contributing to fluctuations in material prices and supply chains, increasing volatility in the cost of steel, lumber, and related inputs.
To address challenges arising from its tariff dispute with the US, the Canadian government introduced a broad package of measures in September 2025 to protect and modernise key industries. This includes a CAD5bn ($3.8bn) Strategic Response Fund to help businesses adjust to trade disruptions. The package also allocates CAD186m ($136.6m) to fully implement a new ‘Buy Canadian Policy’ that gives priority to domestic suppliers in federal procurement and funding. Additionally, CAD79.9m ($58.5m) will be deployed over five years to establish the Small and Medium Business Procurement Program, designed to improve access to federal contracts for SMEs.
Economic, market and political risks
Canada’s economic and policy outlook is being shaped by a challenging combination of external trade uncertainty, softening labour market conditions and renewed inflation risks. The Bank of Canada has maintained its policy rate at 2.25% but has cautioned that conflict in the Middle East has introduced additional uncertainty by driving up oil and gas prices. This is expected to raise inflation in the near term even as overall economic growth remains subdued. As a result, policymakers face a difficult balance: tightening rates could further weaken an already fragile economy, while easing policy risks allowing inflationary pressures to expand.
At the same time, the labour market has shown signs of deterioration, with more than 100,000 full-time jobs lost in the first two months of 2026 and unemployment rising to 6.7%. This reflects increasing vulnerability to US tariff measures and broader trade-related uncertainty.
Trade and external risks remain particularly significant due to Canada’s continued reliance on the US market, despite retaining leverage in negotiations through energy exports, critical minerals, foreign direct investment and defence procurement. Uncertainty surrounding US tariffs and the review of the North American trade framework is already affecting business activity and employment, especially in sectors closely tied to cross-border trade such as automobiles, steel and aluminium. While Canada’s position as a key supplier of energy and critical minerals provides negotiating strength, the economy remains exposed because a substantial share of goods exports depends on US demand.
On the positive side, construction continues to outperform some areas of the broader economy, with federal capital spending plans supporting ongoing demand. Investments in greener shipping and supply chains may also enhance the transport of construction materials and improve infrastructure delivery. However, housing affordability remains under pressure due to structurally weak productivity in construction, rising input costs and delays in permitting. Statistics Canada has linked slow productivity growth in the sector directly to affordability challenges, particularly highlighting weaker performance among smaller firms.
Building permits declined in 2025, cost pressures remain elevated, and regional markets such as British Columbia are showing clear signs of strain. These include job losses in construction and real estate, slow home sales, financing challenges and warnings that new housing starts could decline further.
Overall, Canada retains key strengths, including credible policymaking, strategic leverage in trade negotiations and an active construction and an infrastructure pipeline. However, near-term risks remain elevated. External pressures stem primarily from US trade policy, volatile global energy prices and supply chain uncertainty. Domestically, these factors are contributing to weaker hiring, softer housing activity and a construction sector that requires improvements in productivity, labour capacity and permitting efficiency to support affordability and long-term growth.
In March 2026, both the Federal Reserve and the Bank of Canada kept interest rates unchanged, maintaining tight construction financing conditions that are likely to slow approvals and dampen housing starts. In Canada, the outlook continues to be influenced by spillover effects from US tariff policy, contributing to a softer labour market and unemployment at 6.7%. The country also faces cost-push inflation risks linked to disruptions around the Strait of Hormuz, though it retains some negotiating leverage with the US due to its energy export profile.
Construction demand remains supported by federal capital investment plans, but housing activity continues to be constrained by low productivity, high costs and permitting delays, with British Columbia experiencing particular pressure. GlobalData reported increased risk levels in Q4 2025, with Canada rising by 0.05 index points and the US by 0.1. The US maintained 20th place in the CRI rankings, while Canada dropped one position to 18th.
Riches of the Earth
A Ferrochrome Smelter Plant is proposed for construction at Sault Ste. Marie, Ontario.
The project will process ore from the Ring of Fire, a mineral-rich area in the James Bay lowlands. It will create 300 to 500 jobs and 1,000 indirect jobs.
In 2018, Sudbury, Sault Ste. Marie, Thunder Bay and Timmins were shortlisted for the project location. In July 2018, Thunder Bay and Sudbury were cancelled, and finally Sault Ste. Marie was selected based on environmental site suitability, capital and operating costs, and an assessment of community acceptance.
The project is also known as “Ring of Fire Metals”.
Noront Resources is planning to build a Ferrochrome Smelter Plant in Ontario, Canada. The project involves the construction of a production facility. It includes the construction of a warehouse, storage area, installation of heavy cranes, safety system and conveyor belts.
Hatch Engineering has been appointed as a consulting engineer of the project, and it is expected to produce 15,000 tonnes of nickel and 6,000 tonnes of copper from 300,000 tonnes of underground mining material annually over 17 years.
Green hydrogen and ammonia production on the cards
A renewable hydrogen production and distribution facility is under construction at the port of Stephenville.The development is intended to accelerate the expansion of green hydrogen, a clean, transportable fuel produced from wind and water. World Energy is positioning itself as one of the first large-scale global suppliers of this resource in the region.
The project is expected to generate 1,800 direct construction jobs, 300 operational roles and 3,500 indirect jobs.
It will be Canada’s first commercial-scale green hydrogen and ammonia production facility, powered by a 3.5GW wind farm and producing approximately 250,000t of hydrogen annually using 1.5GW electrolysers.
Canada and Germany have signed a green hydrogen agreement under which Germany is expected to import hydrogen via pipeline to North Rhine-Westphalia, a major industrial hub in Europe that is emerging as a key hydrogen centre.
World Energy GH2 is leading the project in Newfoundland and Labrador, Canada and the development will also include a hydrogen plant with a capacity of 250,000 tonnes per annum, supported by a 1,800MW electrolysis facility. Additional infrastructure includes production and storage units, transport systems, a terminal, cooling systems, 530 wind turbines, filters, generators, safety systems and pipelines.
The project will be delivered in three phases:
- Phase 1 ($5,000m): Construction of 2,000MW across two onshore wind farms (Port au Port and Codroy), 600MW of solid oxide electrolyser cells, a hydrogen processing facility and polymer electrolyte membrane electrolysers. A green ammonia plant will convert 60,000t of hydrogen annually into approximately 360,000t of ammonia.
- Phase 2: Development of a third 1,000MW wind farm (location pending) and expansion of hydrogen production capacity.
- Phase 3: Evaluation of additional wind resources and potential further expansion.
SK Ecoplant holds a 20% stake in Phase 1 and will supply and install electrolysers, as well as carry out FEED work. It will also manage EPC activities for ammonia production alongside SK Eco Engineering. Bloom Energy is a potential supplier of solid oxide electrolysis cells.
Triten IAG is serving as engineering design consultant, while RBC Capital Markets and Green Giraffe Advisory are financial advisors. Legal advisory roles are held by McCarthy Tétrault and McInnes Cooper. McDermott has been appointed as design-build contractor.
Digging for gold
A gold mine is being proposed approximately 240km northeast of Yellowknife.
The project aims to expand gold exploration and production capacity to meet increasing regional demand. The site contains 6.5 million ounces of proven and probable reserves and is expected to operate for 15 years.
Seabridge Gold acquired the property from Newmont in 2002 and is planning its development in the Northwest Territories, Canada.
The project involves a 6.1MTPA openpit gold mine across 5,400ha, along with a processing plant of equal capacity. Supporting infrastructure includes haul roads, a 43.2MW diesel power plant, a 31.5MW wind farm, catchment dams, administrative facilities, airstrip expansion and installation of machinery and safety systems.
Consultants include Resource Modeling, Tetra Tech-Wardrop, Moose Mountain Technical Services, Golder Associates, EBA Engineering Consultants, WN Brazier Associates, Rescan Environmental Services and SRK Consulting (Canada).
Key milestones:
- July 2002: Initial technical report completed
- January 10, 2012: Fifth mineral resource model released
- 24 July, 2012: Preliminary feasibility study issued
- 5 September, 2012: Study submitted to Yellowknife Council
- 10 September, 2012: Walsh Lake deposit discovered
- 11 March, 2014: First resource estimate for Walsh Lake released
- Q4 2018: Drilling completed
- September 2019: Permit applications submitted
- August 2022: Preliminary Economic Assessment published
As of February 2026, ownership transfer to Valor Gold Corp is in progress, with completion expected in June 2026.
Working the iron
An iron ore processing facility is planned in the Labrador Trough belt, 170km north of Schefferville in Nunavik. MetalQuest Mining is leading the project in Quebec, Canada.
The development includes a 30MTPA processing plant with primary and secondary crushing, screening, dry processing systems, sampling stations, rail siding, storage, administrative buildings and equipment such as stackers, reclaimers and train loadout systems.
SNC-Lavalin Group is providing feasibility study services, while Met-Chem Canada is responsible for technical reports.
The feasibility study and technical report were completed in April 2015. However, the project has been placed on hold due to market conditions.
MetalQuest acquired the project in November 2022 and signed an Exploration and Pre-Development Agreement with the Naskapi Nation of Kawawachikamach in December 2023. Planning activities are ongoing as of January 2026.
Building up research
The University of British Columbia (UBC) is undertaking the construction of a therapeutics manufacturing plant at Canada’s Immuno-Engineering and Biomanufacturing Hub in Vancouver, British Columbia, Canada.
The project involves the construction of a 2,323m2 six-storey facility. It includes the construction of an administrative building, a cafeteria, a logistics centre, a central power plant, research centres, testing centres, storage facilities, laboratories and parking facilities, and the installation of machinery and safety and security systems.
Acton Ostry Architects has been appointed as an architect, Axiom Builders as a contractor, AES Engineering, WSP Canada and Glotman Simpson Consulting Engineers have been appointed as consulting engineers.
Green garbage
Southern Alberta Energy from Waste Association (SAEWA) and Hitachi Zosen Inova (HZI) are planning to construct an energy-from-waste plant in Alberta, Canada.
The project involves the construction of an energy-fromwaste facility with a processing capacity of 16,500t of waste per annum. It includes the construction of waste recycling units, storage tanks an administrative building, a powerhouse and the installation of generators.
In September 2025, the Newell Regional Solid Waste Management Authority signed two agreements with Global Green Energy Group – Canada (GGEGC), a subsidiary of Global Green International Investments to build and operate the facility.
Subject to the approval from the Alberta Environment and Protected Areas (AEPA), construction works will commence to complete in the second quarter of 2027.
