Canada's planned major projects could attract $670 billion in additional investment between 2026 and 2030, generating an estimated $443 billion in economic activity and creating opportunities for about 280,000 businesses, according to a new study from the Business Development Bank of Canada.
The study, conducted with support from the Transition Accelerator, estimates the investments could lift Canada's gross domestic product by 4.1 per cent above the baseline scenario by 2030, with small and medium-sized enterprises (SMEs) expected to account for most of the businesses involved in delivering the projects.
The investment pipeline spans housing and civil infrastructure, energy, defence, mining, natural gas and artificial intelligence data centres. However, the report identifies financing constraints, limited capacity and complex procurement processes as barriers that could prevent some businesses from benefiting from the expected spending.
“The stars are aligning for Canadian businesses. A wave of major projects, new technologies and changing ownership trends are opening the door to a decade of growth,” said Isabelle Hudon, president and CEO of BDC. “If we help entrepreneurs scale through acquisitions, partnerships and productivity gains, Canada can create a new generation of medium-sized and large companies that will power our economy for years to come.”
Five sectors account for $670B pipeline
Housing and civil infrastructure represent the largest share of the projected investment, at $220.1 billion, followed by energy at $159.8 billion and defence at $153.7 billion. Mining and natural gas account for another $125.8 billion, while AI data centres represent $11.2 billion.
The study estimates the projects could generate more than $10,000 in additional economic activity per Canadian over the five-year period. Much of that activity is expected to flow through the supply chains supporting the developments, creating potential contracts for businesses providing goods and services.
BDC chief economist Pierre Cléroux said the projects could help Canadian companies expand and change the country's business landscape, provided they can meet the demands of large-scale development.
“Canada’s major-project boom won’t just build infrastructure. It can build the next generation of Canadian growth companies and really move the needle on the firm size mix across our country,” said Cléroux. “The supply chain for these projects is critical, and it won’t be easy. But with the right support, SMEs are set to leverage these opportunities to invest in technology, scale faster than ever before and create lasting value for the economy long after the projects are completed.”
SMEs signal plans to expand
BDC surveyed 1,000 Canadian businesses for the study, including 750 already involved in major projects and 250 interested in participating. The findings suggest many businesses with existing project experience expect to increase their involvement over the next two years.
Overall, 67 per cent of SMEs surveyed said they expected to increase their participation in major projects over the next 24 months. That proportion rose to 88 per cent among high-growth firms and 77 per cent among businesses in the technology and primary sectors.
More than one-third of respondents said they could scale up their operations, while others indicated they could expand their involvement to a more limited extent. The findings point to significant interest in the project pipeline, although businesses' ability to participate varies according to their size, sector and experience.
The study found that SMEs already deriving most of their revenue from major projects were generally better positioned to pursue additional opportunities. Larger businesses in construction, technology and information services, particularly those with experience delivering large projects, appeared more prepared to respond to future demand.
However, complex tendering processes and tight deadlines remain obstacles, even for businesses with ambitions to grow.
Financing and procurement remain barriers
Smaller businesses in sectors such as retail and manufacturing were less likely to identify opportunities arising from the major-project pipeline. Among companies interested in participating but uncertain about how to proceed, perceived risks and cash constraints were identified as key barriers.
The report suggests that improving access to project information and adjusting procurement requirements could help more SMEs compete for contracts. Recommended measures include dividing contracts into smaller lots, reducing financial or bonding requirements, establishing more predictable payment terms and adapting procurement processes to better reflect businesses' operational realities.
These changes could help smaller suppliers increase their participation while addressing the capacity constraints that may limit their ability to take on larger contracts.
The study's findings suggest that the scale of the projected investment alone will not determine how broadly Canadian businesses benefit. Their participation will also depend on whether they can access opportunities, secure the financing needed to deliver contracts and expand operations quickly enough to meet project requirements.
BDC said the investment pipeline could provide a growth opportunity for Canadian SMEs, but businesses will need support to overcome the operational and financial barriers identified in the research.