CANADA | MARKET INSIGHT
government allocated approximately CAD13bn ($9.5bn) in planned cash expenditures for BCH until 2030, including grants, loans and direct asset development. BCH aims to construct 26,000 new housing units across the country by 2030. In May 2026, the governments of Canada and Alberta announced funding of over CAD323m ($235.5m) for the development of over 3,600 housing units across 41 projects in Alberta. Moreover, in early June 2026, Canadian Prime Minister Mark Carney announced that the Canadian government and the government of Québec will invest CAD10bn ($7.3bn) by 2036 through the Build Communities Strong Fund (BCSF) and the Canada Public Transit Fund (CPTF) in Quebec. This encompasses the development of transformative transit projects, homes, healthcare infrastructure and 11 new projects to electrify public transit.
Ups and downs The industrial construction sector is expected to shrink by 5.2% in real terms in 2026, owing to a decline in industrial building investment, coupled with an increase in supply chain disruptions resulting from US tariff uncertainty. Over the remainder of the forecast period, however, the industrial construction sector is expected to recover at an annual average growth of 2.3% between 2027 and 2030, supported by government efforts to protect the country’s steel industry from tariff uncertainty, alongside rising private investment in the manufacturing sector. Industrial construction is currently experiencing
the largest negative impacts of the tariff shock and is the only construction segment set to contract in 2026. GlobalData expects output to decline 5.2% in real terms to $20.8bn, before recovering at an annual average of 2.3% between 2027 and 2030 to reach $22.8bn. At 6.1% of total construction, the segment is small, but its swing is the clearest indication of how US trade policy is reshaping Canadian capital investment. The contraction reflects manufacturers
freezing factory expansion amid Section 232 uncertainty. Newly imposed US tariffs on non- CUSMA-compliant Canadian goods scale with metal content, meaning the most metal-intensive products face the highest exposure, raising input costs and eroding the competitiveness of Canadian output in the US market. According to Statistics Canada, investment in industrial building construction fell 14.5% YoY in the first quarter of 2026, following a 7.3% decline in 2025, with manufacturing plants the hardest-hit project type. With the July 2026 CUSMA review having ended without an extension, shifting the agreement into annual reviews through 2036, the tariff outlook remains unresolved, and discretionary manufacturing investment is likely to stay on hold into 2027.
Federal industrial policy is increasingly geared
towards reshoring and expanding domestic manufacturing capacity. The Productivity Super-
The lead and zinc smelter in West Kootenay, British Columbia, Canada.
Deduction, effective from Budget 2025, allows full immediate expensing for new manufacturing equipment and production buildings acquired through 2030, while the Policy on Prioritizing Canadian Suppliers strengthens demand for domestically built plant and equipment. The Major Projects Office has already advanced 15 nation-building projects worth over CAD125bn, several of which involve new processing and manufacturing facilities tied to critical minerals and battery supply chains. The forward pipeline, which GlobalData tracks at $204bn, points to a different industrial base from the one now contracting. It is led not by conventional manufacturing but by resource processing and the energy transition: the Lac Otelnuk Iron Ore Processing Plant, the Jansen Potash Mine surface facilities, and a cluster of green hydrogen and ammonia plants worth more than $24bn combined, alongside the $5bn St Thomas EV battery plant.
Reshoring of metals capacity is also emerging,
with Tenaris expanding a steel pipe facility in Sault Ste Marie (CAD306m, $221m) and Rio Tinto adding 160,000t of annual aluminium smelting capacity in Quebec (CAD1.4bn, $1.1bn). For contractors, the key consideration is timing: 68.2% of pipeline value remains in pre-planning
or planning as of June 2026, and most large starts fall in 2027 and 2028, leaving near-term workloads thin.
Project analytics The industrial construction projects pipeline in Canada stands at $204bn. The pipeline, which includes all projects from pre-planning to execution with a value above $25m, is skewed towards early- stage projects, with 68.2% of the pipeline value being in projects in the pre-planning and planning stages as of June 2026. The largest industrial project in the pipeline is the $14.2bn Lac Otelnuk Iron Ore Processing Plant. The project involves the construction of a primary and secondary crushing facility, a product screening facility, a dry processing system, product sampling stations, a rail siding, a storage facility and an administrative facility. Another significant project is the $13bn Jansen Potash Mine Surface Facilities. It involves excavating two 6.5m shafts approximately 1,005m in depth, with a capacity of 160,000t per annum. Additionally, construction will involve the installation of service shafts, head frame and hoist, six underground borers and surface infrastructure, as well as the construction of a freezing plant.
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