The Canadian construction industry has run into stiff headwinds early in 2026.
Year-to-date through April, total construction starts have dropped nearly 40 per cent compared with the same period last year, weighed down by sluggish nonresidential and civil activity. The full-year outlook offers little relief, with total starts forecast to fall 16.3 per cent from 2025.
This weakness reflects a softening macroeconomic backdrop. U.S. tariffs, trade uncertainty, a shrinking population and the global energy shock have all eroded current and future economic momentum.
Even so, not every market is moving in the same direction. Select segments are expected to expand against the broader downturn, opening targeted opportunities for firms positioned to pursue high-growth markets.
Strength exists even with weak headline numbers
The national figures paint a discouraging picture, with declines forecast across many markets. Yet beneath the top-line numbers, several geographies are still positioned for growth.
Ontario accounted for more than 40 per cent of Canada’s total construction market in 2025, and its pullback weighs heavily on the national outlook.
Excluding Ontario, however, construction is forecast to expand in 2026 – though the combined dollar value of the rest of the country remains sizably smaller.
Alberta and British Columbia lead the way, with starts projected to grow 7.1 per cent and 12.2 per cent, respectively. Strong civil forecasts underpin both provinces, as governments push to build roads, power infrastructure and other heavy engineering projects.
Quebec is also set for growth, albeit a more modest 6.9 per cent, supported by forecast increases in medical, commercial and industrial construction that keep the province in positive territory.
Two smaller provinces also stand out for even sharper gains, with Saskatchewan and Manitoba expected to grow 130.7 per cent and 22.2 per cent, respectively. These outsized figures warrant context, as spending swings can be larger and more volatile in smaller markets.
What it means for construction
The downward headline number for Canadian construction starts masks a more nuanced reality. Ontario —Canada’s largest province by both population and construction spending — accounts for much of the projected drop. Look beyond it, and several regions are positioned for meaningful growth. For construction firms, the path forward lies in identifying and targeting these high-growth markets, where opportunity persists even as the national picture softens.
Devin Bell in the associate economist with ConstructConnect.
