Canada Construction Industry Market Size & Forecast - by Value and Volume (area and units), 40+ Market Segments Across Residential, Commercial, Industrial, Institutional, Infrastructure Construction, City Level Construction by Value and Construction Cost

According to ConsTrack360, construction market in Canada is expected to grow by 3.9% on annual basis to reach CAD 222,111.9 million in 2025.

The construction market in the country experienced robust growth during 2020-2024, achieving a CAGR of 5.8%. This upward trajectory is expected to continue, with the market forecast to grow at a CAGR of 3.2% during 2025-2029. By the end of 2029, the construction sector is projected to expand from its 2024 value of CAD 213,780.1 million to approximately CAD 261,301.4 million.

This report provides a detailed data-centric analysis of the construction sector in Canada, offering a comprehensive view of market opportunities in the building and infrastructure construction industry at the country level. With over 100+ KPIs covering growth dynamics in building and infrastructure construction, construction cost structure analysis, and analysis by key cities in the country, this databook provides a wealth of data-centric analysis with charts and tables, ensuring stakeholders are fully informed.

It offers a comprehensive analysis of market dynamics in the construction sector through a range of KPIs such as value, volume, and number of units. The building construction covers detailed segmentation over 30+ segments in residential, commercial, industrial, and institutional sectors.

ConsTrack360’s research methodology is based on industry best practices. Its unbiased analysis leverages a proprietary analytics platform to offer a detailed view of emerging business and investment market opportunities.

Key Insights

Canada Residential Construction
Economic pressures, evolving housing trends, and government interventions are transforming the Canadian residential construction industry. Rising construction costs and labor shortages continue challenging developers, while higher mortgage rates have slowed homebuyer demand. However, the sector adapts through increased investment in multi-family housing, modular construction, and purpose-built rental developments, particularly in high-demand urban areas. Large-scale government initiatives, such as the National Housing Strategy and Housing Accelerator Fund, are critical in supporting new projects, easing regulatory barriers, and encouraging innovation in affordable and sustainable housing.
Despite these efforts, challenges remain, including supply chain disruptions, stringent zoning laws, and ongoing labor shortages that may delay project completion and impact affordability. Developers and investors must navigate interest rate fluctuations and rising compliance costs for green building initiatives while capitalizing on government incentives and public-private partnerships. Leveraging advanced construction technologies and streamlining approval processes will be crucial for maintaining growth and ensuring the industry meets Canada’s long-term housing needs.

Macroeconomic Factors
• Rising material costs and labor shortages continue to strain Canada's residential construction sector, with increasing prices for lumber, steel, and concrete pushing up project expenses. Higher mortgage rates have further reduced homebuyer affordability, slowing demand for new housing developments and making it more difficult for builders to maintain project momentum.
• The industry is shifting toward multi-family housing and modular construction to address affordability challenges, particularly in urban centers. Investment in prefabricated housing is also growing, helping to reduce costs and shorten construction timelines, while purpose-built rental housing is gaining traction in high-demand markets such as Toronto and Vancouver.
• Despite these adaptations, the sector faces significant challenges, including supply chain disruptions that delay material deliveries and slow project completion. Stringent zoning regulations restrict new housing supply in key areas while fluctuating interest rates create uncertainty for developers and homebuyers.

Project Landscape
• The Canadian residential construction sector is experiencing significant public and private investment, with major projects addressing housing shortages and sustainability goals. Initiatives such as Toronto’s Housing Accelerator Fund, Vancouver’s Broadway Plan, and Montreal’s Sustainable Housing Program highlight the push for high-density, energy-efficient housing developments in key urban centers.
• While private developers continue dominating high-rise condo construction, the public sector is increasingly active in affordable housing through subsidies and public-private partnerships (PPPs). Municipal governments are also expanding land-use policies to promote new housing supply, easing affordability pressures and accelerating project approvals.
• The federal National Housing Strategy (NHS) has committed $82 billion over 10 years, while Canada Mortgage and Housing Corporation (CMHC) funding supports affordable housing projects nationwide. Provincial initiatives, such as Ontario’s More Homes Built Faster Act, are further streamlining permitting processes to encourage faster housing development and address growing demand.

Government Policies & Programs
• The Canadian government is implementing various initiatives to accelerate residential construction and improve affordability. Programs such as the Housing Accelerator Fund and the Affordable Housing Innovation Fund are designed to reduce bureaucratic delays and encourage cost-effective building solutions. At the same time, the First-Time Home Buyer Incentive provides financial support to make homeownership more accessible.
• Provinces such as Ontario and British Columbia are revising zoning laws to allow for increased housing density, enabling the construction of more duplexes and triplexes. Meanwhile, federal measures such as the GST rebate on rental housing and relaxed foreign buyer ban exemptions aim to stimulate investment in purpose-built rental developments and attract private sector participation.
• Housing policy interventions vary at different levels of government, with federal initiatives focusing on nationwide homebuilding targets and provincial programs prioritizing social and low-income housing. Municipal governments such as Calgary and Halifax are also streamlining permitting processes to fast-track housing developments and meet growing demand.

Industry-Specific Developments
• The Canadian residential construction industry is rapidly integrating technological advancements to improve efficiency and reduce costs. The widespread use of prefabrication and 3D printing streamlines homebuilding, while AI-driven project management tools enhance budgeting accuracy and project timelines. Smart home integrations are also becoming a key feature in new developments, increasing consumer demand for high-tech living spaces.
• Sustainability is at the forefront of construction trends, with mass timber construction gaining traction as a lower-carbon alternative to traditional materials. Government incentives, such as net-zero and passive house development grants, are accelerating the transition to greener housing, while stricter energy efficiency standards such as Canada’s 2025 Net-Zero Building Code are reshaping industry practices.
• The sector also faces a persistent skilled labor shortage, impacting project completion timelines and overall costs. The demand for electricians, HVAC specialists, and green-building professionals continues to rise, prompting provincial training programs to attract youth and newcomers to construction and sustainable development careers.

Canada Commercial Construction
The Canadian commercial construction industry is undergoing significant changes, driven by rising costs, shifting market demands, and government incentives. While inflation and high interest rates continue challenging developers, the growth of mixed-use projects and logistics infrastructure presents new opportunities. Government policies, such as tax incentives for office-to-residential conversions and green building initiatives, reshape urban development and encourage sustainable and adaptable commercial spaces.
Despite these opportunities, the sector faces persistent challenges, including high office vacancy rates, ESG compliance costs, and labor shortages that impact project timelines. Developers and investors must navigate these hurdles while leveraging public-private partnerships (PPPs) and technological advancements to enhance efficiency. Moving forward, prioritizing logistics hubs, mixed-use developments, and sustainable commercial projects will be crucial for maximizing long-term returns and ensuring resilience in a rapidly evolving market.

Macroeconomic Factors
• Rising material and labor costs and high interest rates continue to challenge commercial construction in Canada, making financing new projects more expensive. Although the cost of raw materials such as steel and aluminum has stabilized, it remains elevated compared to pre-pandemic levels, adding financial strain to developers.
• The industry is witnessing a shift toward mixed-use developments, integrating residential, retail, and office spaces to meet evolving urban demands. Meanwhile, warehouse and logistics infrastructure is expanding rapidly due to the e-commerce boom. At the same time, declining demand for traditional office spaces drives adaptive reuse projects, converting offices into residential or hybrid-use buildings.
• Despite these trends, high office vacancy rates in major cities such as Toronto and Calgary remain a key concern as remote and hybrid work reshape workspace needs. Supply chain disruptions, though improving, still pose risks to project timelines, while ESG compliance costs are rising as developers work to meet stricter sustainability standards in commercial construction.

Project Landscape
• Major commercial projects across Canada are reshaping urban landscapes, with The Well in Toronto leading as a $5 billion mixed-use development. Vancouver’s Broadway Plan drives transit-oriented commercial growth, while Amazon’s continued investment in fulfillment centers expands logistics infrastructure nationwide.
• Private investors remain dominant in retail and office space development, while the public sector is increasing support for cultural and convention centers. Public-private partnerships (PPPs) are growing in developing green-certified commercial buildings, and municipalities are actively working to convert underutilized office spaces into mixed-use developments.
• While commercial construction spending is projected to slow in 2024 due to high interest rates, industrial and logistics spaces continue to see strong investment growth. To support long-term economic development, government funding remains focused on public infrastructure projects, including convention centers and urban business hubs.

Government Policies & Programs
• The Canadian government is actively promoting sustainable commercial construction through initiatives such as the Canada Green Buildings Strategy, which supports the development of energy-efficient buildings. Additionally, tax incentives for office-to-residential conversions are helping to repurpose vacant office spaces, while federal and provincial innovation hubs drive investments in technology and research park developments.
• Federal carbon reduction incentives are making net-zero commercial buildings more viable to further encourage environmentally friendly projects. Developers investing in brownfield redevelopment benefit from property tax incentives, while new municipal zoning laws enable denser, mixed-use commercial and residential spaces.
• While the federal government funds sustainable retrofits for commercial properties, Ontario and British Columbia are leading zoning reforms to support urban densification; additionally, provincial tax incentives are driving new commercial construction, particularly in technology and manufacturing hubs, ensuring long-term economic growth.

Industry-Specific Developments
• The Canadian commercial construction sector rapidly integrates smart building technology to enhance energy efficiency and automation. Developers increasingly use AI-driven project planning tools to manage costs and timelines, while digital twin technology is being adopted to optimize large-scale projects.
• Sustainability remains a priority, with a stronger push for LEED-certified commercial buildings and net-zero real estate to become an industry standard by 2030. Government-led projects also focus on retrofitting older commercial properties to improve energy efficiency and align with environmental policies.
• Despite these advancements, the industry faces a growing shortage of skilled labor, particularly in green construction techniques and AI-driven building management. The demand for sustainable design and automation specialists is rising, but labor shortages in major metropolitan areas are slowing down large-scale commercial developments.

Canada Institutional Construction
The Canadian institutional construction sector remains a stable and essential investment area, driven by strong public healthcare and education infrastructure funding. However, rising labor and material costs, combined with budget constraints, continue to challenge project timelines and overall affordability. The increasing reliance on modular and prefabricated construction is helping mitigate some cost pressures, while smart and energy-efficient public buildings are becoming more prominent, supported by government-backed sustainability initiatives. Despite these opportunities, skilled labor shortages pose a significant risk, particularly in specialized sectors such as healthcare and education construction. Public-private partnerships (PPPs) are growing in long-term infrastructure funding, allowing greater investment in hospitals, schools, and research centers. Moving forward, leveraging technology, green building practices, and innovative construction methods will ensure the sector remains efficient, cost-effective, and resilient to evolving economic conditions.

Macroeconomic Factors
• Rising labor and material costs continue to pressure institutional construction projects, particularly in healthcare and education, leading to budget constraints at both provincial and federal levels. The government is increasingly adopting modular construction and prefabrication to control expenses, improving efficiency while addressing affordability concerns.
• The sector is seeing significant expansion, particularly in healthcare infrastructure, with major hospital projects in Ontario, British Columbia, and Quebec. Higher education construction is also rising, including research labs, student housing, and smart campus expansions, integrating advanced technology for long-term energy savings.
• Despite the growth, institutional construction faces challenges such as budget constraints delaying major projects, skilled labor shortages impacting delivery timelines, and increased sustainability compliance costs due to stricter energy efficiency regulations. These factors require innovative solutions, including public-private partnerships and workforce development initiatives, to maintain progress in the sector.

Project Landscape
• Major institutional projects are underway across Canada, including the $1 billion New St. Paul’s Hospital in Vancouver, Ontario’s $3 billion school construction plan, and McGill University’s new research center in Montreal. These developments highlight the ongoing demand for healthcare, education, and research infrastructure, addressing long-term population and innovation needs.
• Institutional construction remains largely publicly funded, though private sector investment in healthcare and education is growing through public-private partnerships (PPPs). Additionally, impact investors and pension funds show increased interest in sustainable institutional projects, supporting long-term resilience and environmental goals.
• Despite economic uncertainties, federal and provincial budgets for institutional construction remain strong, with $2 billion allocated nationally for green retrofits. Investment in infrastructure resilience and sustainability is expected to remain stable, ensuring the long-term viability of critical public sector developments.

Government Policies & Programs
• The Canadian government actively supports institutional construction through initiatives such as the Canada Infrastructure Bank (CIB) Investment, which has committed $10 billion to projects such as hospitals and educational facilities. Additional funding from health infrastructure grants and the Green and Smart Public Buildings Initiative is promoting the development of energy-efficient institutional buildings across the country.
• To encourage sustainable development, the Federal Net-Zero Buildings Program offers incentives for green institutional projects, while provincial grants support the expansion of healthcare and education facilities. New zoning policies in urban centers also facilitate the growth of mixed-use institutional developments, ensuring more efficient land use and infrastructure integration.
• At the federal level, the focus remains on broad healthcare and education funding, while provinces such as Ontario and Alberta are leading efforts in school expansions. Municipal governments invest in community centers and cultural institutions, ensuring institutional infrastructure keeps pace with urban population growth and evolving public needs.

Industry-Specific Developments
• The institutional construction sector in Canada is leveraging AI-driven facility management to enhance operational efficiency in hospitals and schools. Additionally, modular and prefabricated construction methods are gaining traction, reducing costs and improving project timelines, while digital twin technology is optimizing infrastructure planning.
• Sustainability remains a priority, with increased investment in net-zero hospitals and schools and the adoption of mass timber and carbon-neutral materials. Government incentives also encourage solar energy and efficiency upgrades in public buildings, supporting long-term environmental goals.
• However, workforce shortages in specialized construction trades continue to slow institutional projects, particularly in healthcare and education. To address this, funding for training and apprenticeships is increasing, aiming to develop a skilled labor force that meets the growing demand for institutional infrastructure.

Canada Industrial Construction
The industrial construction sector in Canada continues to experience strong growth, driven by increasing demand for logistics, warehousing, and advanced manufacturing facilities. Government incentives for clean energy and EV battery production fuel investment in sustainable industrial developments, while automation and modular construction are helping improve efficiency and reduce costs. However, rising material and energy costs and labor shortages in skilled trades pose challenges that may impact project timelines and overall investment confidence.Despite these challenges, government-backed industrial projects remain a key driver of economic expansion, particularly in EV manufacturing, semiconductor production, and renewable energy infrastructure. Developers and investors should focus on high-growth sectors supported by federal and provincial policies, such as clean energy, automation-driven logistics hubs, and modular factory construction. Addressing labor shortages through upskilling programs and workforce development initiatives will ensure long-term sustainability and continued industrial growth in Canada.

Macroeconomic Factors
• Rising material costs for steel and concrete and labor shortages in specialized trades continue to push up industrial construction budgets and delay project timelines. Higher interest rates discourage speculative industrial developments, though demand for logistics and manufacturing spaces remains strong due to long-term industry needs.
• The sector is witnessing rapid expansion in logistics and distribution centers, fueled by e-commerce growth and supply chain demands. Additionally, government incentives drive investment in advanced manufacturing, particularly in EV production and clean energy infrastructure, shaping the future of industrial development in Canada.
• Despite strong demand, industrial construction faces high energy costs, zoning and land-use restrictions, and global supply chain disruptions. These factors continue to impact project feasibility, particularly for equipment-heavy developments such as factories and processing plants, requiring adaptive strategies and government support.

Project Landscape
• Major industrial projects are shaping Canada's economic landscape, including the $7 billion Volkswagen EV battery plant in Ontario, large-scale Amazon and Walmart fulfillment centers in Ontario and Alberta, and the $40 billion LNG Canada project in British Columbia, which is set to enhance the country’s energy infrastructure. These projects reflect the growing demand for logistics, clean energy, and advanced manufacturing facilities.
• The private sector continues to lead industrial construction, particularly in warehousing and logistics, while public investments are increasing in semiconductor manufacturing and clean energy. Additionally, foreign direct investment (FDI) is significantly funding large-scale projects, particularly in EV battery production and renewable energy infrastructure.
• With over $20 billion in government incentives allocated for clean energy manufacturing, industrial construction is expected to remain strong. Investment in carbon capture, hydrogen fuel development, and green industrial projects will further shape the sector, ensuring long-term growth and sustainability.

Government Policies & Programs
• The Canadian government actively supports industrial construction through initiatives such as Canada’s Critical Minerals Strategy, which funds EV battery production and mineral processing plants. Additional programs such as the Net Zero Accelerator Initiative and Green Industrial Tax Credits drive investment in clean energy, hydrogen production, and carbon reduction efforts.
• The government offers Investment Tax Credits for Clean Energy Manufacturing to further incentivize industrial growth, covering up to 30% of eligible project costs. Federal and provincial funding is also being directed toward semiconductor manufacturing while zoning reforms in Ontario aim to fast-track industrial developments and attract more investment.
• Federal funding is focused on strategic industrial sectors, including EV batteries, aerospace, and renewable energy. Meanwhile, Ontario and Quebec are leading in advanced manufacturing incentives, while Alberta and British Columbia prioritize energy-related industrial construction, reinforcing Canada’s role in clean energy and resource development.

Industry-Specific Developments
• The Canadian industrial construction sector rapidly integrates automation and AI to optimize factory layouts and project management. Additionally, smart warehouses and logistics hubs are incorporating IoT technology, while modular factory construction is becoming more prevalent, reducing build times and overall costs.
• Sustainability remains a top priority, with net-zero industrial facilities expanding, particularly in manufacturing and clean energy sectors. Governments also invest in carbon capture initiatives and provide provincial incentives for solar and wind-powered industrial buildings, ensuring long-term environmental benefits.
• However, the sector continues to struggle with labor shortages, particularly for welders, machinists, and automation engineers, delaying large-scale projects. To address this, government training programs focus on upskilling workers in automation and clean energy, ensuring the workforce is prepared for the future of industrial construction.

Canada Infrastructure Construction
The Canadian infrastructure construction sector is set for continued expansion, driven by strong government investment in transit, energy, and climate-resilient infrastructure. Major projects, such as the Ontario Line Subway, Champlain Bridge Corridor, and Site C Dam, highlight the priority placed on urban mobility, renewable energy, and economic connectivity. However, rising construction costs, labor shortages, and regulatory approval delays remain key challenges that could impact project timelines and overall efficiency. Despite these hurdles, public-private partnerships (PPPs) create new investment opportunities, particularly in smart cities, digital infrastructure, and sustainable energy projects. Government-backed incentives for low-carbon materials, EV charging networks, and climate-adaptive infrastructure will further drive growth. Moving forward, leveraging technology, automation, and workforce training programs will be crucial for improving efficiency and ensuring Canada’s infrastructure sector meets long-term economic and environmental demands.

Macroeconomic Factors
• Rising material costs for steel, concrete, and asphalt, combined with skilled labor shortages, continue to push up infrastructure construction expenses across Canada. Additionally, supply chain disruptions are affecting the availability of specialized components for transit and energy projects, leading to further delays.
• The industry prioritizes mass transit expansion and green mobility, with significant investments in urban transit and renewable energy infrastructure such as wind, solar, and hydroelectric projects. There is also an increasing focus on climate resilience, with new projects aimed at disaster-proofing infrastructure in flood-prone regions.
• Despite these investments, regulatory approval delays, rising interest rates, and aging infrastructure remain key challenges, straining federal and provincial budgets. Slower private-sector investments due to higher borrowing costs could further impact infrastructure development timelines.

Project Landscape
• Canada's infrastructure sector is witnessing major public transit, energy, and transportation investments, including the $28 billion Ontario Line Subway in Toronto, the $16 billion Site C Dam in British Columbia, and the $8 billion Highway 413 expansion in Ontario. These projects aim to improve urban mobility, enhance clean energy capacity, and strengthen regional connectivity.
• While the public sector continues to dominate large-scale infrastructure developments, public-private partnerships (PPPs) are growing in importance, particularly in transit and renewable energy projects. Additionally, institutional investors are increasingly financing green infrastructure, reflecting a shift toward sustainability-focused projects.
• Budget allocations remain strong, with the Canada Infrastructure Bank (CIB) investing $35 billion in transportation, clean energy, and digital infrastructure. Provincial governments, especially in Ontario, Quebec, and British Columbia, prioritize road and transit expansions, while municipal spending is increasing to support urban development and climate resilience initiatives.

Government Policies & Programs
• The Canadian government is making significant infrastructure investments through initiatives such as the Investing in Canada Plan (IICP), a $180 billion, 12-year funding program covering multiple sectors. The Public Transit Fund also commits $3 billion annually to urban transit expansions, while the Disaster Mitigation and Adaptation Fund (DMAF) supports climate-resilient infrastructure projects.
• To encourage sustainability, the government offers tax credits for clean energy infrastructure investments and expands EV charging networks through federal and provincial incentives. However, carbon pricing mechanisms impact overall infrastructure project costs, requiring developers to adapt to evolving regulatory requirements.
• Federal funding is focused on national transit, energy, and broadband infrastructure, while provinces lead regional transit and road expansions in high-growth areas. Meanwhile, municipal governments prioritize smart city initiatives, integrating technology to enhance urban mobility and sustainability.

Industry-Specific Developments
• The Canadian infrastructure sector rapidly adopts AI and big data analytics to improve project planning and traffic management. Additionally, drones are being used for construction site monitoring, enhancing efficiency and safety, while 3D printing and prefabrication are helping reduce costs and accelerate project timelines.
• Sustainability remains a priority, with an increased focus on low-carbon concrete and sustainable materials in infrastructure development. Net-zero public buildings and transit hubs are becoming more common, while smart energy grids and battery storage investments ensure long-term environmental benefits.
• However, the industry struggles with labor shortages, particularly in transit and energy infrastructure projects. To address this, government-funded apprenticeship and retraining programs are being expanded to equip workers with skills in renewable energy and green infrastructure, supporting the future workforce.

Scope

• Market Data and Insights: This report provides market size and forecast across 40+ construction segments for ten years from 2019 – 2028 in Canada. KPIs covered include the following:
• Market size by value
• Market size by volume of construction
• Number of units

• Canada Economic Indicators

• Canada Top Cities Construction Data

• Canada Residential Building Construction Coverage: 10-year market size & forecast in value and volume (area and units) terms by
• Housing type (multi family, single family)
• Key cities (Tier – 1, Tier – 2, Tier – 3 segmentation)
• Price point/income level (luxury, mid-tier, affordable)
• Construction stage (new construction, re-development & maintenance)

• Canada Residential Green Building Construction Coverage: 10-year market size & forecast in value and volume (area and units) terms by
• Green building by Housing type (multi family, single family)
• Green building by Key cities (Tier – 1, Tier – 2, Tier – 3 segmentation)
• Green building by Price point/income level (luxury, mid-tier, affordable)

• Canada Commercial Building Construction Coverage: 10-year market size & forecast in value and volume (area and units) terms by
• Office (further broken down by Grade A, Grade B, and Grade C)
• Retail (further broken down by Grade A, Grade B, and Grade C)
• Hospitality (further broken down by Grade A, Grade B, and Grade C)
• Restaurant (further broken down by Grade A, Grade B, and Grade C)
• Entertainment
• Sports facility
• Other commercial building construction
• Construction stage (new construction, re-development & maintenance)

• Canada Commercial Green Building Construction Coverage: 10-year market size & forecast in value and volume (area and units) terms by
• Office green building construction
• Retail green building construction
• Hospitality green building construction
• Restaurant green building construction
• Entertainment green building construction
• Sports facility green building construction
• Other commercial green building construction

• Canada Industrial Green Building Construction Coverage: 10-year market size & forecast in value and volume (area and units)
• Manufacturing Plants building construction
• Chemical & Pharmaceutical building construction
• Metal & Material Processing building construction
• Construction stage (new construction, re-development & maintenance)

• Canada Institutional Building Construction Coverage: 10-year market size & forecast in value and volume (area and units) terms by
• Healthcare construction
• Educational construction
• Other building construction