**Canada**: The Canadian infrastructure sector is set for a robust 2025 driven by government incentives, a growing population, and public-private partnerships, amidst concerns over geopolitical challenges and rising material costs impacting project progress and funding strategies.
The Canadian infrastructure landscape experienced robust activity throughout 2024, with numerous projects initiated as a result of government incentives and the investment tax credit (ITC) regime. As the country moves into 2025, stakeholders are assessing the implications of ongoing and future developments. Key questions arise regarding the actual progress of planned projects, the potential impact of U.S. legislative changes on capital flows, and the economic ramifications of a “tariff war.”
In 2025, the infrastructure sector is anticipated to continue thriving, bolstered by notable population growth of 10 per cent since 2019, the pressing need for improved housing, and extensive government initiatives aimed at facilitating energy transitions. The Bank of Canada’s reduction of interest rates further supports this optimistic outlook, despite underlying political uncertainties in both Canada and the United States.
Amidst a busy 2024, infrastructure transactions reached significant volumes, showcasing emerging sectors such as telecommunications and utilities, which involved billions in investments. Projections indicate that infrastructure project investments will surpass C$300 billion, marking a rise of C$8 billion compared to 2024. This development includes 15 new initiatives amounting to C$22 billion, with sectors such as healthcare, energy, and water management taking centre stage.
Public-private partnerships (P3s) are becoming increasingly vital, with expected funding of over C$76 billion, indicating a shift toward collaborative financing models amid infrastructure deficits estimated at $270 billion across the country. The Canada Infrastructure Bank is set to deploy $5 billion in private funding for public transit projects, echoing successful approaches employed in other countries like Australia, where private investment has effectively complemented public funding.
As the decade progresses, trends such as digitalisation and decarbonisation will likely propel infrastructure investment. With the growing demand for data centres, driven largely by advancements in artificial intelligence (AI), provincial governments are already exploring project opportunities, illustrated by initiatives like Alberta’s AI Data Centre Strategy.
The Canadian government is actively promoting infrastructure investment via the $15 billion Canada Growth Fund, alongside significant allocations for clean power and green infrastructure projects, all part of a broader commitment of $60 billion through to 2035. Provinces including British Columbia, Ontario, and Quebec are advancing their energy transition strategies, with large-scale projects expected to substantially reshape energy generation and management in the coming years.
However, the interplay of geopolitical factors, particularly the “Trump Tariffs,” poses challenges that could affect the infrastructure domain. Rising costs for essential materials, including steel and aluminium, could lead to increased project costs and longer delays. Analyses from the Canadian Chamber of Commerce highlight the potential for diminished trade volumes, real income reduction, and productivity impacts on both sides of the border.
In terms of construction methodologies, a significant percentage of industry professionals foresee that AI and machine learning will shape operations in 2025, streamlining processes and fostering sustainable practices within project designs. The implications of technological advancements in construction are regarded as essential, even as concerns over inflationary pressures persist.
As Canada navigates the complexities of potential governmental shifts and evolving market dynamics, industry experts observe that 2025 may not represent a straightforward continuation of past trends. Hence, ongoing dialogue among stakeholders will be crucial as the year unfolds, prompting continual reassessment of strategies within the infrastructure sector.
Source: Noah Wire Services
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