Canada’s push to reduce its reliance on the United States is helping fuel major non-residential construction activity, even as cross-border trade tensions continue to create uncertainty for key industries.
The shift comes after a difficult 2025 for Canada-U.S. trade, with tariffs weighing on several major Canadian export sectors. Canada’s share of U.S. imports fell from 12.6 percent in 2024 to 11.2 percent in 2025, marking the second-largest decline among major U.S. trading partners.
Construction Sees a Boost
For the construction industry, the policy shift is providing a lift at a time of broader economic uncertainty.
Canada recorded its highest-ever level of non-residential construction starts in 2025, including civil and non-residential building projects. Although starts are expected to decline by 6.6 percent in 2026, the year is still projected to rank as the second-highest on record.
The trend points to a changing construction outlook, with export infrastructure, resource development and trade-related projects becoming major drivers of activity.
While trade friction with the U.S. remains a risk, Canada’s effort to build more domestic capacity and expand access to global markets is creating new opportunities for construction firms across the country.
Tariffs Put Pressure on Key Sectors
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The Canada-United States-Mexico Agreement protected a large share of Canadian exports from tariffs through its rules of origin, but several industries still faced heavy pressure.
Steel exports fell by 30 percent in 2025, while softwood lumber, aluminum and motor vehicles were also affected by targeted U.S. trade measures. Those pressures have had broader implications for construction supply chains, particularly in sectors tied to manufacturing, resource development and transportation infrastructure.
The uncertainty is expected to continue as CUSMA heads toward review later this year. If Canada and the U.S. fail to reach an agreement by the July 1 deadline, the trade deal could move into annual reviews and eventually lapse in 2036 without a new accord.
Ottawa Turns to Major Projects
In response, the federal government has moved to strengthen Canada’s resource and trade infrastructure. The 2025 budget outlined major spending commitments, including $110 billion for infrastructure, $110 billion for productivity and competitiveness, $30 billion for defence and security and $25 billion for housing.
The federal Major Projects Office is also playing a central role in moving large projects forward. More than $110 billion in projects are currently under consideration, including LNG export terminals, critical mineral facilities, port expansions and northern trade corridors.
WATCH | Canada beefing up export infrastructure to grow capacity
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