Canada's Construction Slowdown: Trade Uncertainty and Shrinking Population Take Toll
Canadian nonresidential construction starts have slowed significantly in the first half of 2026, totaling $26.6 billion, the lowest pace through June over the past five years.
The decline is widespread across seven out of nine construction categories compared to the same period last year, with some of that decrease attributed to the record-high baseline set by 2025.
Macroeconomic headwinds are contributing to this slowdown, including ongoing trade policy uncertainty between Canada and the United States. Cross-border trade has been turbulent due to US tariffs on Canadian goods, which have complicated the Canada-United States-Mexico Agreement (CUSMA). This agreement expired in July 2026, pushing it to annual review through 2036.
Canada's economy is also facing a declining population, with Statistics Canada estimating a 0.5% decrease from Q2 2025 to Q2 2026. A shrinking population adds pressure on two fronts: reduced demand for residential and commercial construction, as well as limited available labor for the construction industry.