How big is the Ontario construction market in 2026?
Ontario remains Canada's largest construction market by a wide margin. Total construction investment (residential, ICI, and engineering) is forecast to exceed $90 billion in 2026, representing roughly 40% of national construction activity. Year-over-year growth is projected at around 3.8%, slower than the 2022-2024 boom but well above inflation. The market split is roughly 55% residential, 25% ICI (industrial, commercial, institutional), and 20% engineering and infrastructure.
Which regions are growing fastest?
Activity is concentrated but not evenly distributed.
- Greater Toronto Area: largest absolute volume, driven by transit (Ontario Line, Eglinton, Yonge North), hospital rebuilds, and continued high-rise residential.
- Ottawa: strong federal, healthcare, and post-secondary spending. LRT Stage 3 in design.
- Hamilton and Niagara: industrial and logistics growth tied to the Stelco lands and Niagara South Bridge.
- London and Windsor: EV battery and auto manufacturing investment (NextStar, Volkswagen PowerCo).
- Northern Ontario: critical minerals and Ring of Fire-adjacent infrastructure ramping up.
What sectors are driving spending?
The biggest growth sectors in 2026:
1. Public transit: $30+ billion of active megaproject work across Metrolinx programs.
2. Healthcare: major hospital projects in Mississauga, Brampton, Windsor, Niagara, and Ottawa.
3. Industrial: EV battery plants, data centres, and warehouse build-outs continue at pace.
4. Education: K-12 capital plan and post-secondary deferred-maintenance backlogs.
5. Long-term care: provincial commitment to add 30,000 LTC beds is still in the build-out phase.
6. Residential: high-rise condo starts have softened but purpose-built rental and missing-middle housing are picking up the slack.
How tight is the skilled trades labour market?
Very. BuildForce Canada projects Ontario will need to recruit and train more than 100,000 new construction workers between 2024 and 2033 to replace retirements and meet demand. The practical result for contractors: wage pressure of 4 to 6% annually, longer project durations on labour-intensive work, and a meaningful margin advantage for firms that can pre-fabricate or modularize.
Where are material costs heading?
After the volatility of 2021-2023, most material categories have stabilized in 2025-2026. Steel and concrete are roughly flat year-over-year, electrical and mechanical components are still 3 to 5% above 2024 due to tariff and supply chain effects, and lumber is volatile but trending down. Contractors should still build in escalation clauses on any project with a build period longer than 12 months.
What should Ontario contractors be bidding on right now?
Highest-opportunity work in 2026:
- Healthcare and education renovation/expansion (steady, well-funded, less price-sensitive)
- Transit station finishes and adjacent civil work (Metrolinx pipeline is multi-year)
- LTC and seniors housing (provincial funding still flowing)
- Industrial fit-outs for the EV supply chain
- Municipal water and wastewater (funded through federal infrastructure transfers)
More competitive (bid selectively):
- High-rise residential general contracting (margins compressed, default risk on some developers)
- Speculative office (still soft)
- Commercial retail new-build
What is the 2027 outlook?
Most forecasters see Ontario construction continuing to grow into 2027 at a similar 3 to 4% pace, with risk skewed to the downside if interest rates stay elevated and residential starts slow further. Infrastructure spending is the floor under the market: federal and provincial commitments through 2033 mean there is a deep, visible pipeline of public work that does not depend on the residential cycle.