Federal initiatives to boost housing supply require robust infrastructure framework
Findings from the Canadian Construction Association’s report, ICIC Construction Quarterly Insights, Q3, 2023 support the need for greater investment in public infrastructure for the greater good of the Canadian economy.
The impact of elevated interest rates and the tightening financial sector have put a strain on investments and overall output, affecting the interest rate-sensitive construction industry. In the third quarter of 2023, the Canadian economy contracted by 0.1 per cent as the Bank of Canada maintained elevated rates to address inflation concerns.
Despite these pressures, construction activity growth remained unchanged during the same period. Positive prospects for the industry have been largely fueled by public investments in infrastructure, which have supported the sector’s growth over the last three years.
In 2022, investment in public infrastructure constituted 69 per cent of the total share of infrastructure investments. These investments amounted to $76.2 billion, significantly contributing to the economy. The construction sector, a major beneficiary, added $30.5 billion in value and generated 247,000 jobs.
Asset classes, such as transportation engineering infrastructure (bridges, tunnels, and road networks) and institutional building construction, benefitted the most as they were major recipients of the added value of public investments. During a period of slowing investments, the impact of public investments in building critical infrastructure becomes even more crucial, acting as a catalyst for economic growth and job creation.
Federal initiatives to boost the housing supply will require a robust infrastructure framework. Public investments in critical infrastructure play a pivotal role not only in stimulating economic growth and creating job opportunities; they are also key to building the necessary foundations to support the growing population and contribute to the overall quality of life enjoyed by Canadians.
For more information on this report or the work CCA is currently focused on to address the issues covered, please email Louis-Philippe Champagne, Director of Government Relations and Policy, or Mario Baker, Assistant Manager of Economics and Policy Development.
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