Canada’s construction sector is set to undergo transformative change in 2026.
Challenges and opportunities are aplenty for the Canadian construction industry heading into 2026. Image courtesy of creative/Adobe Stock.
As Canada’s construction sector enters 2026, it stands at a pivotal moment when rising infrastructure demand, rapid technological adoption, generational labour turnover and macro-economic uncertainty converge. It’s a moment in time that represents more than another cyclical shift. For many firms, 2026 may be the year that determines who adapts and thrives, and who struggles to remain competitive in a market defined by accelerating change.
The fundamentals are unmistakable. BuildForce Canada’s latest national outlook points to a tightening labour force that will continue to shape the industry’s trajectory into the foreseeable future. Over the next decade, Canada is expected to lose 270,000 experienced tradespeople to retirement, while total demand will require more than 380,000 new workers by 2034 to maintain the pace of construction. The labour force, currently hovering around 1.73 million with roughly 1.65 million actively employed, is already stretched thin, and the national unemployment rate of 4.6 per cent reflects a market in which demand for skilled workers continues to exceed supply.
Civil infrastructure the defining engine of 2026
While labour remains challenging, the activity outlook for 2026 is generally optimistic, particularly for civil and infrastructure work. Provincial data shows strong regional demand. In Ontario, BuildForce forecasts that the province will require roughly 154,100 new construction workers by 2034 to meet planned infrastructure and housing needs. And Alberta’s non-residential construction employment is projected to rise eight per cent above 2024 levels by 2026, even as the province prepares to replace more than 43,000 retiring workers. These figures align with what industry leaders see on the ground: momentum is building in public infrastructure, energy transition projects, hydroelectric upgrades, data centre development and large civil works.
Rod Elliott, District Manager for Civil Engineering at Trimble, describes a pipeline dominated by heavy power and digital infrastructure projects.
“We see a lot around power, power generation, data centres and hydroelectric,” he says. “That’s where we see the biggest growth. AI is a growing area too, and we’re getting deeper into autonomy. The biggest barrier is safety, but we’re making big advancements. One of the highest-growth areas is training on the tech. There’s huge demand for it.”
For contractors – those supporting major road, bridge, water, energy and structural projects – this represents a significant opportunity. Civil work is increasingly complex, schedule-driven and technology-enabled, making accurate pouring, forming, layout, validation and quality control more important than ever.
Technology moves from support tool to core strategy
The recently released report titled ‘Canadian construction: Doing more with less’, which was developed by KPMG in collaboration with the Canadian Construction Association (CCA), confirms that construction’s pivot toward technology has reached a tipping point. Among other things, the report reveals that ninety per cent of construction leaders now see tools such as AI, BIM, digital twins, analytics and automation as essential to increasing efficiency and closing labour gaps. Importantly, these investments are paying off. The report also notes that 81 per cent of respondents say recent tech investments have already boosted productivity, and a majority expect digital tools to become central to how they manage labour shortages in the years ahead.
In the concrete sector, this shift is serving to reshape how crews work. Robotic layout systems have replaced much of the manual survey work that has traditionally dominated sites for decades. Automated rebar-tying tools are making high-density placements faster and safer. Digital pour tracking, concrete scanning and real-time QA/QC workflows are helping project teams avoid rework and compress schedules. And precast and modular concrete solutions, once considered niche, are gaining traction as builders seek predictable timelines that reduce labour intensity. In fact, according to Nolan Frazier, Sales Leader at Procore Technologies, the acceleration is no longer theoretical.
“We’re seeing steady growth across infrastructure, energy transition and digital infrastructure, delivering more capital than ever and doing it with fewer people,” he explains. “Contractors are trying to find any sort of operational leverage through things like technology, workflows and automation. Growth doesn’t just mean building more. It’s about building smarter.”
On that note, Frazier expects an eight to ten per cent increase in project activity across key segments in 2026 but cautions that the benefits that are yielded may not be evenly distributed.
“There’s a tone of the haves and have nots,” he notes. “Larger players benefit from scale and diversification, while some smaller companies struggle if they don’t modernize or diversify.”
Economic uncertainty and trade volatility
Beyond most other issues, the current global economic environment remains volatile and unpredictable. Interest rates have pushed many residential and commercial developers here at home to postpone or cancel projects altogether, resulting in the creation of a split market in which publicly funded infrastructure moves ahead while private-sector activity lags. Leor Margulies, Partner at Robins Appleby, warns that without decisive action by the Bank of Canada (BOC), significant portions of the market may continue to struggle.
“The BOC is finally waking up to the fact that the economy is in serious trouble,” he asserts. “The huge downturn in the new home market along with this real estate recession is even worse than the period between 1990 and 1995. The BOC needs to take dramatic steps to cut interest rates if there’s to be any hope of restarting the moribund new home construction industry or the impact will be severe.”
Equipment: a quiet cost driver
Contractors who rely on critical fleets of excavators, telehandlers, compaction equipment, pumps and finishing tools, are facing another subtle but important challenge in the way of fleet inflation and emissions-compliance costs. Darryl Cooper, President of Cooper Equipment Rentals, explains that as a result, rental rates have not kept pace with rising operating expenses.
“Equipment rental rates haven’t kept pace with inflation,” Cooper asserts. “New emissions-compliance standards have driven operating expenses up, while rental rates have remained relatively flat. In this environment, a dependable equipment partner is more important than ever.”
He goes on to explain that a predictable and healthy public infrastructure pipeline is essential toward stabilizing Canada’s rental market, especially as the impacts of U.S. economic pressures continue to ripple northward.
A new era of procurement
One of the most transformative forces shaping 2026 may be procurement reform. For decades, the lowest-bid model has dominated Canadian construction, often at the expense of collaboration, innovation and risk sharing. But that system is showing its limits. Developers increasingly recognize that complex infrastructure projects require different delivery models that reward efficiency, enhance communication and leverage the expertise of contractors earlier in the design process.
This is especially relevant in heavy civil and concrete-intensive projects, where everything from formwork staging to pour sequencing to weather windows carries risk. Progressive design-build, construction management and integrated project delivery models allow contractors to influence constructability at earlier stages, improving both cost certainty and schedule performance.
A defining year for Canadian concrete construction
Viewed holistically, the signals are clear. Canada’s construction industry is heading into 2026 with a healthy mix of strong public-sector demand, transformative technological adoption and significant workforce pressures. For contractors, the path forward will favour those who adapt, embracing digital tools, investing in training, preparing for sustainability mandates and positioning themselves strategically within the booming civil and infrastructure markets.
Those who adapt will help build the next generation of Canada’s infrastructure – bridges, highways, power systems, water networks and resilient communities shaped, poured and reinforced through concrete. Those who lag behind will risk being outpaced in a market where efficiency, innovation and expertise will matter more than ever.
