Ontario Construction Report staff writer
Canada’s engineering and construction sector is on track to expand by 6.4% in 2026, driven by robust demand for multi-family housing and sustained public infrastructure investments, according to the latest industry outlook from consulting firm FMI.
Total construction spending put in place across Canada is projected to reach $457.1 billion this year, building on a 4.7% gain in 2025, FMI reported in its Third Quarter 2026 North American Engineering and Construction Outlook.
The positive top-line growth comes despite broader economic headwinds. Canada entered a technical recession earlier this year after posting two consecutive quarters of year-over-year gross domestic product declines, though the C.D. Howe Institute’s Business Cycle Council has refrained from declaring a formal recession due to moderate GDP movements and subsequent economic resilience.
Additionally, Statistics Canada data noted a 0.1% decline in resident population during the first quarter of 2026, driven by a 4.4% drop in non-permanent residents.
Multi-family residential development stands as one of the country’s strongest growth drivers, projected to surge 15.7% in 2026 to $73.9 billion. Residential alterations and improvements are also expected to grow 5.9% to $85.7 billion.
Conversely, single-family residential construction is forecast to contract 4.2% to $28.2 billion. FMI attributes the decline to sharp pullback in annualized single-family building values in major regional markets during the first quarter, including a 21% drop in Ontario and a 15% decline in Alberta. Overall residential spending is projected to end the year up 7.8% at $187.9 billion.
Non-residential building construction is expected to increase 3.8% to $142.8 billion. Double-digit gains are anticipated in healthcare facility construction (up 13.5% to $12.7 billion), hotel lodging (up 14.7% to $3.4 billion), and transportation structures such as transit and airport facilities (up 11.4% to $28.1 billion). Manufacturing construction is forecast to fall 4.7% to $34.5 billion as industrial megaproject starts slow down.
In non-building civil infrastructure, total spend is projected to climb 7.5% to $126.4 billion. Power construction leads all major non-building categories by volume, expanding 8.1% to $83.3 billion, driven by grid modernizations and clean energy projects. Highway and street infrastructure spend is forecast to rise 6.2% to $31.0 billion, while water supply and wastewater projects are expected to grow 6.1% and 6.6%, respectively.
According to FMI’s long-term forecast, Canadian construction put in place will maintain steady momentum over the next five years, projected to surpass $536 billion annually by 2030.
For a closer look at these market dynamics and executive commentary on project pipelines, watch 2026 North American Engineering & Construction Overview: First Quarter.
This video is relevant because it features FMI leadership detailing sector-by-sector construction spending trends and growth projections across North America.