BUILDERSDIGEST   Quarter 1  2026   15
THE CANADIAN ECONOMY AND CONSTRUCTION PART 1
rates have settled down from their peak in 
the middle of 2023.
Observing the country’s GDP, Hall notes 
that Canada is in recession. Hall clarifies 
that technically, the numbers don’t say 
that, but strip away two large one-time 
developments in Q3 of 2025 and 
reported growth of 2.6 per cent suddenly 
becomes -0.8 per cent. Put that together 
with the -1.8 per cent seen in the second 
quarter of 2025, and the subsequent - 
0.6 per cent in Q4, and Canada in  
reality is in recession. He notes that two 
quarters of negative GDP has historically 
meant the country is in recession.  
“The economy has essentially stalled,”  
says Hall.
HOUSING AND IMMIGRATION
Hall, looking at the housing market, 
explains that despite the federal and 
provincial cries for more affordable 
housing, “the housing market is in the 
doldrums.” The data for average housing 
prices in Canada is down -19.6 per cent 
since its high in early 2022. Ontario fell by 
more than the national number at -24.3 
per cent, and the GTA is -25.3 per cent 
over the same period. Once again, this 
fuels uncertainty amongst investors  
and developers.
Next, Hall explains forecasts from the 
federal government on immigration 
and the impact they will have on the 
housing market. He presents a table 
with government immigration numbers 
from 2021-2024 and estimates in the 
coming years from 2025-2027. However, 
the bottom line of the table was seen in 
the last two headings, which were net 
new housing requirements by year and 
cumulative housing requirements.
“The table tells us that the net annual 
housing requirement based on current 
immigration will become a negative 
number by 2025 and a cumulative 
negative number by 2027,” says Hall. 
“If the forecasts in this table become 
real numbers, the construction industry 
needs to be careful of the plans they are 
making for housing work in the years 
to come. You do not want to have new 
housing units you cannot sell.” He notes 
that the construction industry needs to 
target industries that are diversifying their 
international sales.
Overall business investment in plant 
and equipment is suffering, due to 
plummeting office space construction 
and stagnant investment in machinery 
and equipment. Future growth will be 
in Canada’s export arena. First and 
foremost, we need for Canada to reach a 
trade deal with the U.S. and Mexico. But 
growth is also likely from companies that 
are connected to the diversification of 
international sales to fast-growing parts  
of the world, and the accompanying 
efforts to provide the enabling  
export superstructure.
THE FUTURE FOR NOW
Hall sums up his presentation by looking 
at the key things for the construction 
industry to be aware of going forward, as well 
as the potential opportunities for the industry  
as follows:
1.	 The outlook for business in more traditional 
construction is a bit of a disaster. Economic 
volatility and uncertainty are not helping.
2.	 Canada is in a recession at present with 
weak consumer demand, and this has to be 
accounted for in future plans.
3.	 Uncertainty surrounding the renewal of the 
CUSMA deal with the U.S. and Mexico has 
many investment plans on hold.
4.	 Look for company opportunities in non-
traditional places, particularly exporters 
with their sights on Asia.
5.	 It appears that public infrastructure funds 
will jump start things, and private funds will 
move in later.
6.	 Look to the part of the economy that’s 
diversifying exports. It is a “game changer.”
7.	 Work from the defence strategy appears to 
be a promising opportunity.
Hall concludes by saying that “Canadian 
construction companies need to be vigilant 
about what is going on in Canada and 
internationally, so they can quickly react 
to change as it happens and respond to 
opportunities as they arise.”  ◄

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