The Nation-Building Blueprint

The 2025 Federal Budget, released Nov. 4, 2025, refocuses Canada’s fiscal policy on building capital investment stock to support long-term economic development, with major new capital expenditure plans and expansion of existing infrastructure investment programs.

In total, over the next five years, the government intends to invest $115.2 billion in infrastructure: $54 billion for core public infrastructure (e.g., water, wastewater, transit); $37 billion in other infrastructure and assets (e.g., health, innovation); $19 billion in Indigenous Community and Municipal infrastructure and $5 billion in trade and transportation infrastructure.

In reaction to the budget, the Canadian Construction Association (CCA) stated that they “welcome today’s federal budget, which puts construction at the heart of Canada’s economic strategy through investments in infrastructure, defence and housing. These measures are critical to supporting the businesses and people who build the homes, transportation networks and other projects Canadians rely on every day.”

As a single point of contact, working with federal departments, provinces, territories and Indigenous Peoples, the MPO will expedite the process and reduce decision timelines to a maximum of two years.

Major Projects Office

The 2025 budget allocates $213.8 million over five years to support the new Major Projects Office (MPO), a key commitment made in August under the Building Canada Act. Of this amount, $19.8 million will be sourced from existing departmental resources. The MPO will advance nation-building projects in Canada by simplifying and accelerating federal decision-making and structuring for projects identified as being in the national interest. As a single point of contact, working with federal departments, provinces, territories and Indigenous Peoples, the MPO will expedite the process and reduce decision timelines to a maximum of two years. As well, the MPO will help structure and co-ordinate financing from the private sector, provincial and territorial partners, and the federal government.

“The CCA also welcomes investment for the MPO, and the recognition within the budget that ‘for too long, the construction of major infrastructure in Canada has been stalled by arduous, inefficient approval processes,” the CCA stated.

Infrastructure investment

• Airports: Through the Airports Capital Assistance Program, the budget provides $55.2 million for local and regional safety infrastructure projects and upgrades over the next four years.
• The Trade Diversification Corridors Fund: Over the next seven years, $5 billion is allocated towards improved access to overseas markets by investing in ports, freight railways, highways and airports.
• The Arctic Infrastructure Fund: $1 billion over four years to support major northern transportation assets such as all-season roads and highways, airports and seaports with a dual civilian-military use.
• Build Communities Strong: Beginning in 2026-27, this fund will invest $51 billion over 10 years, followed by $3 billion per year in ongoing investments, to revitalize local infrastructure. Housing, Infrastructure and Communities Canada will administer the fund through three streams:
  • The Provincial and Territorial Stream will provide $17.2 billion over 10 years to support infrastructure projects and priorities in housing, healthcare and education. This could include transit infrastructure, colleges, universities, medical schools and water and wastewater facilities.
  • The Direct Delivery Stream will support regionally significant projects, large building retrofits, climate adaptation and community infrastructure with $6 billion over 10 years. This could include clean-energy generation and storage projects, flood protection and new community and recreation spaces.
  • The Community Stream is a rebranding of the existing Canadian Community Building Fund, which will deliver $27.8 billion over 10 years to support local infrastructure projects such as local roads, bridges, water systems and community centres.

“This budget acknowledges the acute need for resilience and community investment,” said John Gamble, president and CEO, Association of Consulting Engineering Companies. “The Build Communities Strong Fund will help address Canada’s infrastructure deficit while empowering local governments to deliver the housing, transportation and health facilities Canadians urgently need. It recognizes that within our communities, all projects are major projects.”

• Build Canada Homes (BCH): A new federal agency under Housing, Infrastructure and Communities, BCH was established to increase the supply of affordable housing in Canada. With an initial cash investment of $13 billion over five years and collaboration with other levels of government, BCH will catalyze a more productive home-building industry, with fewer barriers and less red tape, and provide financing to support builders and prioritize projects using Buy Canadian procurement.
• First-time Home Buyers’ GST Rebate: At a cost of about $3.9 billion in tax savings over five years, the government will eliminate the federal five per cent GST (the federal HST share) on new or substantially renovated homes for first-time buyers. This applies to builder sales, owner-built homes and housing co-ops and is part of the overall plan to supercharge the housing industry.
• Defence: $81.8 billion over five years is allocated to rebuild, rearm and reinvest in the Canadian Armed Forces (CAF). Canada has made a NATO pledge to meet at least two per cent of GDP for core defence, moving toward five per cent of GDP by 2035. This funding will be used for personnel, infrastructure and equipment, and will include a new Defence Investment Agency and Defence Industrial Strategy to streamline procurement and boost domestic production. A large part of the total investment ($19 billion over five years) goes to repair and sustain CAF capabilities and invest in defence infrastructure, including expanding ammunition and training infrastructure.

Workforce Development

The Union Training and Innovation Program will support union-based apprenticeship training in Red Seals trades with $75 million over three years to stabilize and recruit more apprentices.

“The Build Communities Strong Fund will help address Canada’s infrastructure deficit while empowering local governments to deliver the housing, transportation and health facilities Canadians urgently need.”

– John Gamble, Association of Consulting Engineering Companies

In response, Rodrigue Gilbert, president of CCA, said, “Union training programs play an important role in building Canada’s workforce, but we must ensure equitable access to training and credential recognition for all workers, including the 70 per cent of Canada’s construction workforce that is non-unionized. If we want to build more homes and infrastructure faster, we need investments that don’t leave the majority of workers behind.”

• Protecting workers against improper classification: The deliberate misclassification of employees in the personal services businesses and the trucking industry as independent contractors means that employers are not withholding and remitting the proper amounts of income tax or Canada Pension Plan and employment insurance contributions. Budget 2025 proposes providing $77 million over four years to the Canada Revenue Agency to address this non-compliance.
• Foreign Credential Recognition Action Fund: With an investment of $97 million over five years, the government will work with provinces and territories to make credential recognition fairer, faster and more transparent, bringing foreign-trained professionals into the workforce faster, including in fields facing labour shortages such as construction.
• Labour Market Development Agreements: $570 million over three years is allocated to support training and employment assistance for workers impacted by tariffs and global market shifts to help fill the gaps in in-demand jobs.
• Temporary EI Support Measures: With an estimated cost of $3.7 billion over three years, the government will provide enhanced income support to address job losses resulting from U.S. export losses. In addition, $370.5 million over five years is allocated for temporary flexibilities to the EI Work-Sharing program.
• Youth Employment Investment: To help youth gain the skills and experience to access meaningful job opportunities, the budget is providing $1.5 billion. The Student Work Placement Programs investment of $635.2 million over three years will support around 55,000 work-integrated learning opportunities for post-secondary students. Canada Summer Jobs will support another 100,000 jobs by 2026 with $594.7 million over two years. The Horizontal Youth Employment and Skills Strategy, with $307.9 million, will provide employment, training and support annually for around 20,000 youth facing employment barriers.
• New Workforce Alliances: With a $382.9 million total investment over five years and $56.1 million in ongoing funding, this program will bring together employers, unions and industry groups to address labour market challenges, with a focus on skills development.
• Foreign Credential Recognition Action Fund: Budget 2025 will invest $97 million over five years, working with the provinces and territories to make credential recognition fairer, faster and more transparent, helping foreign-trained professionals contribute more quickly to Canada’s workforce, including in fields facing labour shortages such as health care and construction. Although this is an important step, it is narrowly focused on unionized programs and doesn’t address the majority of construction workers.

Immigration Levels Plan

Along with a reduction in permanent resident admissions, the Immigration Levels Plan will reduce the target for new temporary resident admissions from 672,650 in 2025 to 385,000 in 2026. In recognition of the role temporary foreign workers play in sectors of the economy and parts of the country, the government will take into account industries and sectors impacted by tariffs, as well as the needs of rural and remote communities.

Buy Canadian Policy

Projects funded or approved by all federal agencies and Crown corporations will be required to source Canadian materials and use Canadian labour. The budget allocates $98.2 million over five years beginning 2026-27 and $98.8 million ongoing to Public Services and Procurement Canada to support implementation. Another $79.9M over five years will support the Small and Medium Business Procurement Plan. The goal is to ensure fair competition, reduce red tape and streamline access to federal procurement.

This will have implications for procurement strategies and supply chain composition for major infrastructure projects, depending on whether it is limited to procurement by the federal government or if it extends to all federal government-supported projects. CCA stated that although they support the government’s ambition to strengthen domestic industry, procurement policies must not unintentionally restrict the construction supply chain. Continued dialogue with the construction sector is critical to ensuring that domestic sourcing policies strengthen rather than constrain Canada’s ability to build.

With its clear mandate to develop modern infrastructure and stronger communities, Budget 2025 holds great promise for a strong future for the construction industry and for all Canadians.