How Big Is the Canada Construction Market?
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In 2024, the Canadian construction market was valued at USD 266.7 billion. It is expected to grow to USD 417.3 billion by 2033, with a compound annual growth rate (CAGR) of 5.1% from 2025 to 2033. This growth is driven by major projects in transit, utilities, and residential construction, particularly in urban centers like Toronto, Vancouver, and Montreal. However, challenges like high material costs and labor shortages could slow progress.
What’s Driving Growth?
Several factors are fueling the Canadian construction market:
Urbanization and Population Growth: Canada’s urban population is growing, with over 80% of Canadians living in cities in 2024. Immigration is boosting demand for housing, especially in cities like Toronto and Vancouver, where affordable and multi-family housing projects are a priority.
Government Investments: The Canadian government is pouring funds into infrastructure. The Investing in Canada Infrastructure Program (ICIP) has approved over CAD 24 billion for 5,400 projects, including public transit and green infrastructure.
Green Building Boom: Sustainability is a major focus. The Canada Green Buildings Strategy aims to cut emissions by 40% from 2005 levels by 2030, pushing for energy-efficient buildings and eco-friendly materials.
Technology Adoption: Tools like Building Information Modeling (BIM) and artificial intelligence (AI) are improving project efficiency. The construction robotics market is expected to grow from USD 89.7 million in 2025 to USD 259.5 million by 2033.
Chart: Canada Construction Market Growth (2024–2033)
Canada Construction Market Growth (2024–2033)
Key Trends Shaping the Future
Sustainable Construction: Green buildings are gaining traction. In 2021, Canada ranked second globally for LEED-certified projects, with 205 projects covering 3.2 million square meters. Eco-friendly materials like recycled concrete and energy-efficient designs are becoming standard.
Modular Construction: Prefab and modular building methods are growing due to their speed and cost savings. This market is projected to reach USD 175.4 billion globally by 2033, with Canada adopting these methods for urban projects.
Smart Cities: Canada is investing in smart city initiatives, integrating technology into urban planning. Projects like Toronto’s Sidewalk Labs (though scaled back) show a focus on tech-driven urban development.
Transit-Oriented Development: Projects like the Ontario Line subway in Toronto prioritize housing and infrastructure near transit hubs, reducing urban congestion.
Chart: Growth of Key Construction Segments in Canada (2025–2033)
Growth of Key Construction Segments in Canada (2025–2033)
Impact of Tariffs on the Construction Market
Proposed 25% tariffs on Canadian goods by the U.S. could have a big impact on the construction industry. Canada is a major supplier of lumber, steel, and cement, especially to the U.S. Here’s how tariffs could affect the sector:
Higher Costs: A 25% tariff on Canadian lumber could add USD 6 billion annually to costs, as lumber exports to the U.S. were worth USD 28 billion in 2024. Cement and minerals could see a USD 26 billion cost increase, raising project budgets in both countries.
Project Delays: Higher costs could delay residential and commercial projects, which made up 41.7% of Canada’s construction output in 2023. This is worsened by existing inflation and high interest rates.
Supply Chain Issues: Tariffs could disrupt material supplies, forcing Canadian companies to find new markets or absorb costs, cutting profits.
Job Impacts: The construction sector employed over 1.5 million workers in Canada in 2024. Tariffs could slow projects, threatening jobs if demand drops.
Challenges Facing the Industry
Rising Material Costs: Beyond tariffs, material prices are climbing. The residential building construction price index jumped 18.1% in 2021, and non-residential buildings rose 6.9%.
Labor Shortages: An aging workforce and fewer new workers are causing delays. By 2028, 700,000 trade workers are expected to retire, creating a skills gap.
Regulations: Strict permitting and environmental rules can slow projects and increase costs.
Case Study: Ontario Line Subway Project
The Ontario Line, a CAD 84.7 billion transit project in Toronto, is set to finish by 2030. It uses Building Information Modeling (BIM) for accurate planning and modular construction to speed up work. Despite challenges like labor shortages and rising steel costs, it’s a key example of Canada’s focus on transit-oriented development to support urban growth.
Case Study: Calgary Cancer Centre
The Calgary Cancer Centre, completed in 2024 for CAD 1.4 billion, is a LEED-certified healthcare facility. It uses sustainable materials and energy-efficient systems, aligning with Canada’s green building goals. Despite material cost increases, AI-driven project management kept it on track, showing how technology can overcome challenges.
Key Questions Answered in This Report
How big is the construction market in Canada?
The construction market in Canada was valued at USD 266.7 billion in 2024.What factors are driving the growth of the Canada construction market?
Growth is driven by strong government infrastructure investments, population growth, and urbanization fueled by high immigration. Sustainability trends, like green building practices and renewable energy projects, are reshaping the industry. The expansion of e-commerce, logistics, and technology sectors is also boosting industrial construction, including warehouses and data centers.What is the forecast for the construction market in Canada?
The Canada construction market is projected to grow at a CAGR of 5.1% from 2025 to 2033, reaching USD 417.3 billion by 2033.Who are the major players in the Canada construction market?
Major players include HKC Construction , Aecon Group Inc., Kentel Construction Ltd., PCL Construction, EllisDon, Graham Construction, Kiewit Canada, Ledcor Group, Bird Construction, Flynn Group of Companies, Broccolini Construction, Pomerleau, and others.
Canada’s Construction Outlook
By 2033, Canada’s construction market will grow, driven by infrastructure, housing, and green initiatives. However, tariffs, rising costs, and labor shortages are hurdles to overcome. To stay competitive, companies should:
Use technologies like BIM and modular construction to save time and money.
Train new workers to fill the skills gap.
Adopt sustainable materials to meet green building standards.
Canada’s focus on smart cities, transit, and eco-friendly construction makes it a leader in modern building practices, but careful planning is needed to handle tariff-related challenges.
References:
https://www.imarcgroup.com/canada-construction-marketGlobalData, Canada Construction Market Trends, 2025–2029
https://www.researchandmarkets.com/report/canada-construction-market?srsltid=AfmBOoo9g1eI1bLYTNsPMZWIigv_WMqIhhEgsx8c-VDkNQDAMXM4Pl-b
https://nationalpost.com/news/canada/canadas-new-tariffs-on-u-s-drop-to-nearly-zero-with-exemptions-oxford-economics
