CANADA | MARKET INSIGHT 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 load- out 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.
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.
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