Value of nonresidential construction in Canada - Data and Analysis (1980-2032)

Non-residential construction value in Canada is forecast to fall 1.2% to $190.7 billion in 2026, as elevated input costs and the early, still-limited stage of a renewed federal infrastructure push weigh on new project starts. Escalating trade tensions with the US, including Canada's September counter-tariffs on US steel, have pushed up the cost of metal-intensive building components, prompting some developers to defer new commercial and industrial starts. The Build Communities Strong Fund, a 10-year federal infrastructure commitment launched in April, has yet to meaningfully lift construction activity, with most of its funding scheduled to flow over the coming decade.Even so, the pipeline is filling. Non-residential building permits posted a record quarterly gain in the second quarter, led by institutional projects. Meta's July groundbreaking on a hyperscale data centre campus north of Edmonton, Alberta, signals renewed industrial-building momentum, while a broader turning point in Canada's office and industrial property markets – where national vacancy rates for both segments declined simultaneously for the first time since 2020 – positions the sector for a firmer rebound in 2027.Non-residential construction value has grown at a compound annual rate of 3.2% over the five years through 2026, though the recovery has been uneven. Public investment has done the heavy lifting. Deferred projects moved forward as pandemic restrictions eased, while the federal government's Investing in Canada infrastructure plan and provincial capital budgets sent new hospitals, schools and transit facilities into the ground, powering mid-single-digit growth early in the period. Healthcare and post-secondary expansions have remained central to that institutional pipeline ever since.Industrial and commercial building have followed a boom-and-bust arc. Warehouse construction surged as e-commerce reshaped logistics demand, but industrial development has since moderated from its exceptional pace as absorption slowed and available space accumulated. Office construction has nearly ground to a halt, with projects cancelled or postponed amid persistently high vacancy. That pullback in new supply, combined with returning office attendance, has started to erode the oversupply built up during the pandemic recovery.Financing costs have set the sector's pace. The Bank of Canada's earlier tightening cycle kept borrowing costs elevated, weighing on investment decisions and slowing growth to a crawl even after the central bank began cutting rates in mid-2024. As lower rates filtered through, industrial and institutional spending picked up, before tariffs and rising material costs stalled momentum heading into 2026. Supply chain disruptions and labour shortages have constrained capacity throughout, keeping project timelines long and costs high.