Canada’s non-residential capital expenditures are poised for a significant increase in 2025, with total business and government spending on tangible capital assets projected to reach $388.6 billion. This marks a 5.5% rise from the previous year, driven by growth in public and private sector investments.
The manufacturing sector is set to see the most robust growth, with capital outlays anticipated to rise by 15.5% to $38.4 billion in 2025. This increase reflects investment in key subsectors, including transportation equipment, chemicals, electrical equipment, and food manufacturing. Notably, Ontario is expected to witness a surge in investments, with a 24% increase forecast to reach $18 billion. Much of this growth is fueled by the automotive sector, which continues to see major capital projects following 2024’s announcements.
In Alberta, manufacturing investments will jump by 25.8%, reaching $6 billion, propelled by significant petrochemical facility constructions. Meanwhile, Saskatchewan is set to experience a near doubling of investments in food manufacturing, making it the second-largest province for food manufacturing investments in Canada, surpassing Quebec for the first time.
The mining, quarrying, and oil and gas extraction sector remains the largest contributor to Canada’s capital expenditures. Expected to invest $64.4 billion in 2025, the sector will account for more than 16% of total non-residential capital outlays. Despite a slight decrease in capital expenditures in British Columbia, Alberta and Saskatchewan are projected to see considerable increases. Alberta’s investment in oil and gas extraction is expected to comprise more than half of the sector’s total capital spending.
The largest gains will be seen in Alberta, where investment in the oil and gas extraction subsector will lead the way with a $3.4 billion increase. Saskatchewan will also see an uptick, with $9.6 billion in investments, largely driven by both oil and gas extraction and mining activities.
The utilities sector is expected to grow by 10.3% in 2025, reaching $49.1 billion. This increase is primarily driven by investments in electric power generation, transmission, and distribution, which will see a $2.5 billion rise. The provinces of Saskatchewan, Ontario, and Quebec are set to lead the charge, with each province experiencing double-digit growth for the third consecutive year. Hydro-Quebec has committed to investing nearly $100 billion to enhance the province’s electricity infrastructure by 2035, while Ontario is pushing forward with plans for a substantial increase in renewable energy projects, including 5,000 megawatts of wind and solar power.
Public sector investment continues to thrive, with capital expenditures expected to grow by $8.1 billion in 2025, bringing total public sector spending to $150.6 billion. The health care and social assistance sectors are at the forefront of this investment, with public sector spending projected to rise by 4.9%. In the education sector, however, public sector investment will experience a slight dip of 3.3%, while private sector investments in education are expected to rise significantly.
In addition to the projected increases in 2025, Canada saw significant growth in infrastructure investment in 2023. Total spending on infrastructure assets surged by 10.8%, reaching $135.9 billion. Notably, the road transportation sector experienced the largest growth, with a $3.8 billion increase across all provinces and territories. Manitoba saw the largest percentage increase in road transportation investments, reflecting the province’s ongoing strategic highway initiatives. Similarly, British Columbia and Quebec also reported significant increases in investments in road transportation and health and social protection.