Aggregate private investment

Private investment in Canada is projected to grow 1.2% in 2026, supported by strength in key industries such as mining and software. Mining is expected to lead capital growth, as higher commodity prices improve project returns and motivate firms to expand operations year-round. The federal government is also prioritizing so-called nation-building or critical industries, working to speed up project timelines through faster permitting and, in some cases, streamlined processes that lessen dependence on lengthy federal approvals. If implemented effectively, these policies could unlock additional mining-related capital investment. Software investment is also poised to increase as Canadian businesses respond to heightened concerns about system security and performance. A Capterra survey indicates that, among firms dissatisfied with their current software, 79.0% still plan to raise software spending in 2026, implying that dissatisfaction is prompting upgrades rather than cutbacks and strengthening private investment in digital tools to address issues such as software security weaknesses.

Between 2021 and 2026, aggregate private investment was shaped by a series of dramatic cycles, swinging from sharp contraction to vigorous, yet temporary, rebounds. A strong rebound in 2021 was fueled by vaccination rollouts, stimulus and a surge in pent-up construction and industrial spending, with investment jumping 16.0%. In subsequent years, driven by supply chain disruptions and the war in Ukraine, rising inflation pushed interest rates higher, eventually curbing investment. After modest gains, private investment reversed course in 2023, declining 8.1% as inflation persisted and borrowing costs surged. The energy sector—which has long accounted for roughly a fifth of Canadian business investment—was buffeted by global price swings and intensified global and domestic policy uncertainty as Canada moved towards greener energy sources. Canceling landmark energy projects like Keystone XL underscored vulnerability in resource-linked investments. Housing, a traditional driver of private investment, began to lose strength as affordability and tighter monetary policy constrained new development. Throughout this period, fluctuations in the Canadian dollar supported export-oriented industries, while federal stimulus and targeted infrastructure investment programs partially cushioned the downturn. Aggregate private investment across this turbulent five-year period slipped 0.3% CAGR by 2026.