Private investment in computers and software

Private investment in computers and software reached $54.8 billion in Canada in 2025, driven by post-pandemic digital transformation and improved economic conditions. The increasing adoption of remote work and business technology accelerated investment, while more favorable interest rates in 2025 helped renew capital spending. Despite headwinds from earlier inflation and semiconductor shortages, businesses prioritized efficiency and productivity by upgrading their IT infrastructure and software, positioning technology as a core investment across sectors. Investment growth was further buoyed by government AI initiatives that provided capital, compute access and infrastructure support for technology-driven enterprises.

From 2020 to 2025, investment growth in computers and software averaged 5.5% per year, overcoming volatility caused by the COVID-19 pandemic and related supply chain disruptions. In 2020, the switch to remote work prompted strong technology spend, even as overall capital investment trended downward. Expanding economic activity in 2021 continued this momentum, but supply chain pressures, including a widespread semiconductor shortage and rising costs, limited inventory and investment in hardware through 2022. More constrained corporate profits and budget pressures in 2023 and 2024 led to two years of decline, as inflation reduced consumer spending and equipment appeal diminished. However, government programs supporting AI adoption and innovation became increasingly important, enabling businesses to access high-performance computing and modernize their software capabilities. By 2025, stabilizing inflation and an accommodating interest rate environment have reignited investment, culminating in a 4.2% projected increase for the year.

Apart from macroeconomic recovery and the initial impact of the pandemic, persistent digitization, rising service sector output, and active policy support for innovation have shaped the investment landscape. The underlying expansion of non-energy exports and expansion of the Canadian tech sector strengthened the role of computers and software as essential contributors to productivity and competitiveness. As a result, technology investment has remained more resilient than other forms of capital spending through periods of volatility.