Minister of Housing, Infrastructure and Communities Transition Binder (2025)
Book 5: State of Housing, Homelessness and Infrastructure in Canada

• Section A: State of Housing and Homelessness
• Housing challenges are multifaceted and complex
• Domestic trends impact the supply and demand for housing
• Barriers to increasing housing supply are wide ranging
• Affordability challenges extend beyond homeowners as renters face significant pressures
• Housing needs are uneven – different regions and rural and northern communities have distinct and often greater needs
• The current crisis is exacerbating acute homelessness challenges
• Multi-jurisdictional responsibilities and varied ownership mean other levels of government, the private sector, and non-profits have key roles to play
• The federal government has taken a leadership role in addressing housing and homelessness challenges
• Section B: State of Infrastructure
  • Does Canada have the right kind of infrastructure to meet current and future needs?
  • What is infrastructure?
  • HICC Program Contribution Decisions Since 2016
  • Infrastructure as a shared priority
  • Infrastructure investments have almost doubled in the last two decades
  • Understanding Infrastructure average age and remaining service life helps asset owners to inform early planning and management
  • The condition of infrastructure in Canada
  • Asset management capacity is lower in smaller municipalities, and varies significantly among provinces and territories
  • Current and future infrastructure investments are influenced by key economic, socio-demographic and environmental factors
  • Cross-sectoral impacts of infrastructure - The economy
  • Beyond construction's immediate impact, infrastructure investment contributes to long-term economic competitiveness
  • A highly productive construction sector is critical to growing our infrastructure
  • Declining construction sector productivity risks limiting our ability to deliver Canada's infrastructure needs
  • The construction sector is home to high paying jobs but the benefits are not equal across different working groups
  • Construction materials are an integral part of infrastructure delivery and subject to volatility
  • Cross-sectoral impacts of infrastructure - The environment
  • Infrastructure is crucial to mitigating and adapting to climate change
  • Infrastructure is highly impacted by climate change
  • Resilient infrastructure requires efficient designs and planning
  • Environmental improvements are being made during the construction of infrastructure assets
  • Cross-sectoral impacts of infrastructure - Our communities
  • Infrastructure impacts a community’s ability to participate in the economy and provides opportunities to underserved populations
  • The state of infrastructure – A summary
• Section C: State of Transit
  • Does Canada have the right kind of transit infrastructure to meet current and future needs?
  • Why is it important to invest in public transit and what is HICC's role?
  • The Canada Public Transit Fund provides permanent funding to address a range of transit needs
  • Current stock, investment and condition of transit infrastructure
    • Growing investment in a shared priority
    • Stock of transit infrastructure
    • Condition of transit infrastructure (general)
  • Current Outcomes
    • Transit is inherently linked to housing: More housing near transit means more riders
    • Land-use patterns combine with other factors to favour car travel, though people had increasingly been shifting to transit
    • Post-covid recovery and high costs are key challenges today
  • Future infrastructure needs
    • Canada’s growing population will sustain demand
    • Growing transportation emissions point to continued need for investment in sustainable modes such as transit
  • The state of transit – summary
  • Annex: Regional Lens
    • Major rail transit investments are planned or underway across Canada
    • Rail investment in detail
    • Regional transit – System snapshot

Section A: State of Housing and Homelessness

Housing challenges are multifaceted and complex

Canada is facing a housing crisis

• Middle-income households across the country are finding it increasingly hard to buy homes. These households are often staying in rental housing longer, placing additional pressures on rental supply and increasing rental costs.
• Lack of affordable housing means Canadians find it harder and harder to secure housing where they work or move for jobs, hurting economic growth.
• Vulnerable populations and lower-income households are struggling to have their basic housing needs met due to a lack of suitable affordable housing.
• Rising homelessness and unsheltered homelessness is driven by housing system gaps related to non-market (including transitional and supportive housing), exacerbated by systemic failures along with individual circumstances.

Key challenges in the housing system

Affordability

A crisis that impacts both low-income and middle-class Canadians.

Stability

Canada’s financial system at greater risk from rising house prices and debt.

Sustainability

Need to shift new and existing housing to climate compatibility.

Productivity

Need to improve technology adoption and address labour shortages.

Governance

Canada’s growing and changing population requires a coordinated housing strategy.

Reconciliation/Equity

Entrenched, systematic barriers prevent access to affordable housing.

Sources: based on CMHC data (2023)

Domestic trends impact the supply and demand for housing

High population growth

High population growth largely via newcomers mostly settling in urban areas means that Canada leads G7 countries by far in population growth; rapid population growth has been compounding pressures and costs for communities.

Sources: StatCan Table 17-10-0151-01

Labour shortages

Labour shortages challenge the construction sector; aging workforce with fewer young people pursuing trades means growing gaps between predicted needs and growth. Opportunities to align future skills and needs in new industries (e.g., modular, pre-fab).

Source: Economic Analysis and Modelling, HICC

Increasing home unaffordability impacts ability to access and maintain housing

In 2023, home ownership costs rose to 62.5% of household income while average rent growth reached a record high 8%, exceeding both inflation (4.7%) and wage growth (5%).

Sources: RBC Thought Leadership (2023)

Barriers to increasing housing supply are wide ranging

Increasing costs

The cost to construct a residential building in Canada has increased by 58% since 2020, well outpacing overall inflation rate; tariffs could increase costs further.

Restrictive and time-consuming planning processes

Zoning laws and planning restrictions limit the construction of high-density housing near infrastructure and transit.

Inconsistent government investment

Reduced investments in housing over decades have left gaps in affordable and supportive housing.

(Still) High Interest Rates

Higher interest rates have slowed the economy and reduced the pace of home construction.

Low productivity

The Canadian construction sector lags its counterparts with low rate of adoption of new technologies.

Source: StatCan Table 36-10-0480-01

Sources: Canadian Home Builders’ Association’s (CHBA’s) Municipal Benchmarking Study (2022)

Municipalities have identified barriers to accelerating residential permitting timelines

• Quality of submissions vary, and low-quality submissions require additional municipal time and resources; resubmissions can take a long time.
• Some municipalities work with applicants for longer periods of time, which could be more conducive to getting more built in the long run.

Certain permitting practices can help municipalities build more, faster

• Use of online portals.
• Issuing conditional building permits, allowing construction to begin.
• Evaluating/triaging projects according to risk categories & housing design catalogue.
• Encouraging higher-density applications; may take less time on a per-unit basis.

Affordability challenges extend beyond homeowners as renters face significant pressures

Demand for rental housing continues to be strong with low rental vacancy in 2024 (2.2%) driven by growing population, combined with years of under supply and increasing cost of homeownership.

Canada’s housing system has become financialized in recent decades, with real estate seen as an investment asset:

• Early estimates from the Federal Housing Advocate suggest 20 to 30% of Canada’s purpose-built rental housing is owned by institutional investors.

High rent increases upon turnover of units signal market imbalance:

• The change in average rents in 2-bedroom turnover units far exceeded the change in rents in non-turnover 2-bedroom units in 2024 (23.5% vs. 3.5%).
• Cities in provinces with rent control had lower turnover rates than cities in provinces with rent control which led to higher average turnover rent increases.

As a result of low public investments since the 1990s, non-market housing makes up a small proportion of the housing system (approximately 4%) – affordable units are being lost due to age, disrepair, or conversion to market rents.

Lack of growth in purpose-built affordable rental housing combined with the diminishing non-market housing stock is impacting social areas beyond housing (e.g., health) and disproportionately affecting newcomers, vulnerable and lower-income groups.

While rent growth slowed in most of Canada’s largest rental markets in 2024, renter affordability remains strained, with large increases on new leases

	Overall change in average Rent (2-bed)	Turnover unit average rent change when turned over (2-bed)	Provincial rent guideline indicator
Canada	5.40%	23.50%	N/A
Vancouver	5.50%	26.50%	Yes
Edmonton	7.00%	10.90%	No
Calgary	8.90%	18.70%	No
Toronto	2.70%	40.70%	Yes
Ottawa	5.00%	23.80%	Yes
Montréal	6.30%	18.70%	Yes
Halifax	3.80%	28.30%	Yes

Sources: CMHC Fall Rental Market Report (2024).

Sources: Scotiabank Economics, OECD

Housing needs are uneven – different regions and rural and northern communities have distinct and often greater needs

Housing needs differ across regions

Housing needs differ across regions based on unique demographic, geographic, and economic realities.

• Relative climates and unique supply chains influence provincial building codes which have direct impact on materials used in local residential construction.
• The prevalence of extreme weather events differ across the country with wildfires more prevalent in western Canada, while heat domes and severe storms are projected to worsen in the east.
• There has been a growing mismatch between the housing types being built and those preferred and needed.

Rural and northern communities

Rural and northern communities are challenged to build housing and infrastructure with higher costs, lower revenues, and limited capacity.

• Those in the north also see a shorter construction season, higher transportation, material and labour costs, greater climate impacts and a high proportion of non-market housing.
• Smaller communities dependent on tourism and post-secondary institutions face important challenges for workforce housing as well as maintaining affordable and transparent rental options to accommodate population changes.

Homelessness, in rural and remote areas

Homelessness, including encampments, is increasingly being seen in rural and remote areas requiring different types of supports depending on their size and capacity to respond.

Sources: StatCan & CMHC - 2022 Canadian Housing Survey (provinces) and the 2021 Census (territories)

The current crisis is exacerbating acute homelessness challenges

At the extreme end of the housing spectrum are those experiencing or at risk of homelessness. The lack of affordable and non-market housing impedes efforts to prevent entries to and facilitate exits from homelessness.

Shelter use dropped in 2020, due to the pandemic (i.e. reduced capacity to allow for physical distancing), but has increased since then as economic pressures and international geopolitics (e.g., increases in asylum claimants) have increased demands on the homeless-serving sector.

The number of people who experience homelessness each night has increased.

• In shelters: Average nightly use dropped in 2020 then rose 43% by 2023.

The Point-in-time count in 2024 showed that 57,000 people in 60 communities across Canada were identified as experiencing homelessness.

• This included 34,226 people experiencing homelessness in shelters, 16,684 in unsheltered locations (of whom, 4,425 were in encampments), and 6,241 who were provisionally accommodated in transitional housing programs.

Many more people experience homelessness throughout the year. Over 118,000 people accessed the shelter system alone in 2023.

• Length of shelter stays is increasing, suggesting increasing barriers to exiting homelessness.
• Of this group 28% (an estimated 32,660 people) experienced chronic homelessness in 2023, up from 22% (just under 27,000 people) in 2016.

Note: 2024 shelter user data is not yet available. PiT data from 2024 is not yet publicly available.

The Housing Continuum - Text version

• Homelessness
• Emergency Shelter
• Transitional Housing
• Surportive Housing
• Community Housing
• Affordable Housing
• Market Housing

Multi-jurisdictional responsibilities and varied ownership mean other levels of government, the private sector, and non-profits have key roles to play

Housing challenges are often localized; collaboration and partnership between all orders of government, as well as with the private and non-profit sectors, is critical.

• Housing is a shared responsibility, with overlapping mandates between level of governments
• Majority of housing is privately owned (e.g., 97% of new housing investment was private in 2023); community housing is more prominent in the territories, especially Nunavut.

List of responsibilities in housing by level of governments

Federal Government	Provinces and Territories	Local Governments
Federal taxation (e.g., GST) Banking and financial regulations (e.g., mortgage) National Building Code Immigration levels planning Funding to P/T/Ms and cost-sharing (e.g., programs) Making federal lands available for housing Direct housing project financing (via CMHC) Census and Statistics	P/T taxation (e.g., provincial sales tax) Financial oversight and consumer protection Funding and cost-sharing (e.g., programs) P/T building codes Landlord and tenant rights and responsibilities (e.g., rent control) Rent supplements Income assistance and services (i.e., social and health) Planning and development Community housing funding and delivery Management and sale of P/T lands	Property taxes Responsibilities as delegated by the provinces and territory, such as Zoning, permitting, development cost charges Bylaws (e.g., residential occupancy and repair) Community housing delivery Program delivery and implementation (e.g., homelessness programing)

There have been calls for stronger federal governance and coordination amongst all level of governments from key actors, including the National Housing Accord, the Federal Housing Advocate, the Auditor General of Canada, the National Housing Council and the Social Housing and Human Rights Coalition.

The federal government has taken a leadership role in addressing housing and homelessness challenges

In recent years, the Government has committed significant resources to meet Canada’s housing objectives, with types and levels of interventions increasing over time.

Federal Levers and Initiatives

Federal Lever	Examples of Initiatives
Tax Policy (DoF)	Removing the GST on new rental buildings Increasing the capital cost allowance for new purpose-built rentals
Financial Sector Policies (DoF)	Changes to mortgage rules
Immigration Policies (IRCC)	Reduction in permanent & temporary immigration
P/T bilateral transfers (CMHC)	$15.7 billion agreements (cost-matched; federal share $7.8 billion); include the $4+ billion Canada Housing Benefit to individuals through PTs (cost-matched)
P/T/M Transfers (with conditionality) (HICC/CMHC)	$4.4 billion Housing Accelerator Fund $6 billion Canada Housing Infrastructure Fund $2.4 billion per year Canada Community-Building Fund $3 billion per year Canada Public Transit Fund
Low-cost loans & contributions (CMHC)	$55 billion Apartment Construction Loan Program $14.6 billion Affordable Housing Fund
Federal lands (PSPC)	Public Lands for Homes Plan
National standards and tools	Housing Design Catalogue
Other programs supporting housing ecosystem (e.g., ISED, ESDC, etc)	$50 million Homebuilding Technology and Innovation Fund $90 million for the Apprenticeship Service

Sources: Budget 2024

Section B: State of Infrastructure in Canada

Does Canada have the right kind of infrastructure to meet current and future needs?

To answer this question, it is important to understand Canada’s current state of infrastructure, which can be assessed in a number of ways:

• Stock: Accumulation of an inventory of tangible infrastructure assets over time.
• Investment: Infrastructure spending for the purposes of construction of tangible assets.
• Condition: Standardized scale used to define the current state of an infrastructure asset (i.e., very good, good, fair, poor, or very poor).

Given the changing nature of Canadian society – demographic change, the growth of cities, climate change – understanding current assets cannot tell us whether what we have is what we will need in future.

All asset owners and governments need to be considering how future challenges will impact their need for infrastructure. This can be achieved through asset management practices, and efforts like the National Infrastructure Assessment ^{Endnote *}, which is intended to provide a long-term perspective on Canada's infrastructure needs.

What is infrastructure?

Infrastructure is a set of tangible assets that support the production, delivery and consumption of goods and services by governments, organizations and individuals. Examples of these assets include schools and hospitals; roads, rails and ports; potable water and water treatment facilities; and cultural and recreational facilities.

Governments generally support public infrastructure, which is subset of total infrastructure and refers to assets that provide a service to the public, such as public transit, broadband connectivity, electricity and libraries.

The construction of infrastructure involves a broad range of industries – ranging from natural resources (e.g., mining) and manufacturing (e.g., cement), to engineering and construction.

HICC Program Contribution Decisions Since 2016

• Since 2016, HICC has approved 11,939 projects, totaling over $62B. 2021 marks the beginning of the Rapid Expansion Fund announcements.
• Since 2016, public transit projects represent nearly 46% of announced projects, largely due to significant contributions to large-scale transit systems.
• Since 2020, highway and road program contributions have declined significantly, while resilience and natural infrastructure contributions were last made in 2023.
• Since 2020, the largest growth in program contributions have been in public buildings which comprise sport, recreation, culture, administration, and tourism, with over $1B committed in 2024.

Source: HICC Infrastructure Funding Report

Infrastructure as a shared priority 

Infrastructure investments are a shared responsibility, with the federal government generally partnering with other orders of government to invest in and deliver public infrastructure.

The public sector owns over two-thirds of infrastructure

• 71% of infrastructure in Canada is publicly owned, but the public share varies by asset.

Provinces, territories, and municipalities play critical roles

• 97% of infrastructure is owned by provinces, territories and municipalities.

Collaboration is key to delivering quality infrastructure

Although the federal government's share of owned infrastructure is growing, it mostly acts as a funder and supporter of projects.

The Government of Canada plays a major role in funding and administering infrastructure in Indigenous communities 

The government is partnering with Indigenous communities to fulfill its commitment to close the infrastructure gap in Indigenous communities, which is critical to advancing reconciliation with Indigenous Peoples and fostering healthy, safe and prosperous Indigenous communities.

Sources: Infrastructure Economic Account (Statistics Canada, released Mar 2025).

Sources: Infrastructure Economic Account (Statistics Canada, released Mar 2025).

Infrastructure investments have almost doubled in the last two decades

After stagnating in the late 20th century, real annual investment in infrastructure has nearly doubled from 2003 to 2023.

• Public investment (+125%) has grown more than private investment (+96%). ^{Endnote *}

As the stock of infrastructure grows from increased investment, the level of depreciation to be addressed by sustained, ongoing investment also grows.

• In 2024, $133B was invested in infrastructure, surpassing depreciation by $32B. ^{Endnote **}
• Investment levels since 2000 have meant that the remaining useful life ratio of all assets in Canada has steadily increased from 51.5 to 59.6 – a significant improvement.^{Endnote ***}

Sources: Infrastructure Economic Account (Statistics Canada, released Mar 2025).

Understanding Infrastructure average age and remaining service life helps asset owners to inform early planning and management

• The average age and remaining useful service life of infrastructure assets have improved from a low point around 2000 and have remained stable since 2018.
• According to the Canadian Infrastructure Report Card, early investment in maintenance and repair, while an asset’s service life remains high, can eliminate or delay more costly rehabilitation or reconstruction spending in the future.
• Publicly sharing clear and relevant information on the status of infrastructure in Canada allows stakeholders and members of the public to gain insight on complex systems.

Sources: Infrastructure Economic Account (Statistics Canada, March 2025 data)

The condition of infrastructure in Canada 

More than half of Canada’s key road and water public infrastructure is in good or very good condition

However, condition varies among asset types and owners, and some assets have significant unknown conditions.

In 2022, the total replacement value of Canada’s core public infrastructure was estimated to be $2.3 trillion

More than half (62.5%) of Canada's assets by replacement value are in good and very good condition.

Approximately 16% of assets are in poor and very poor condition, accounting for $357 billion to replace.

Roads and water infrastructure accounted for over three-quarters of the total replacement value.

Rural municipalities owned most of the municipally owned roads (77.4% by length, excluding sidewalks), but they accounted for only 61.4% of the replacement value.

There is a significant infrastructure gap between Indigenous and non-Indigenous communities in Canada

E.g. estimated at $349.2 billion for First Nations communities and $75.1 billion in Inuit Nunangat.

Sources: Canada’s Core Public Infrastructure Survey (CCPI), 2022 data (Statistics Canada, released October 2024). CCPI primarily samples units at the municipal level, with a census of municipalities with at least 1,000 residents, and a sample of rural municipalities with at least 500 residents.

Sources: Canada’s Core Public Infrastructure Survey (CCPI), 2022 data (Statistics Canada, released October 2024). CCPI primarily samples units at the municipal level, with a census of municipalities with at least 1,000 residents, and a sample of rural municipalities with at least 500 residents.

Asset management capacity is lower in smaller municipalities, and varies significantly among provinces and territories

In 2022, over half of local and regional government organizations in Canada had asset management plans in place for most of their core public infrastructure.

• Less than half of public sector organizations had asset management plans in 2022 for the following infrastructure: active transportation (33%); public transit (37%); and culture, recreation, and sport facilities (49%).
• In contrast, more than three-fifths had plans for roads (68%), potable water (64%), wastewater (64%), and bridges and tunnels (60%).
• A higher proportion of urban municipalities had asset management plans, compared with their rural counterparts. Solid waste infrastructure was the sole exception.

Sources: Canada's Core Public Infrastructure Survey (CCPI), 2022

Current and future infrastructure investments are influenced by key economic, socio-demographic and environmental factors

Cross-sectoral impacts of infrastructure - The economy

Beyond construction's immediate impact, infrastructure investment contributes to long-term economic competitiveness

The construction sector is essential to the Canadian economy - accounting for 7% of GDP - valued $152 billion. Households and businesses rely on quality infrastructure to facilitate the creation and transportation of goods, services and people that drive the long-term economic growth.

According to the IMF, in advanced economies, every $1 of public infrastructure investment can boost total economic output by $2.3 after 5 years.

The Global Infrastructure Hub (GIHub) estimates Canada's average infrastructure investment between 2016 and 2022 to be 2.5% of GDP - is 0.32 percentage points higher than the G7 average. However, more investment is needed to meet infrastructure demand – with the GIHub recommending additional annual investment of 0.04% of GDP.

Sources: International Monetary Fund (IMF) and Global Infrastructure Hub - A G20 INITIATIVE

Sources: International Monetary Fund (IMF) and Global Infrastructure Hub - A G20 INITIATIVE

A highly productive construction sector is critical to growing our infrastructure

A strong construction sector is needed to sustain Canada’s infrastructure

From connecting the country through advanced transit systems to providing roads, community buildings and wastewater facilities, Canadians rely on the construction sector to build essential and resilient infrastructure.

As the sector grapples with stagnant productivity, embracing innovative approaches and new technologies can enable the sector to meet growing demands.

Government transparency on the future of infrastructure will be necessary to foster industry confidence and incentivize the private sector's co-investment for sustained growth.

Key challenges facing the construction sector

1. Labour shortages
   • The construction sector is experiencing an extremely tight labour market with job vacancies exceeding unemployment rates.
   • Retainment and recruitment are becoming increasingly difficult and meeting Canada’s construction labour force needs will require ongoing commitments to apprenticeship programs, training, and recruitment.
   • By 2033, 21% of the current construction labour force is expected to retire, leaving the industry with a possible retirement-recruitment gap of 85,500 workers.
     

     

2. Volatile commodity prices and supply chain concerns
   • Volatile commodity prices and supply chain disruptions are forcing the construction sector to grapple with elevated project costs, project delays or abandonment. 

Declining construction sector productivity risks limiting our ability to deliver Canada's infrastructure needs

Labour productivity in the construction sector has lagged other sectors in the past two decades

Between 2001 and 2023, productivity in the construction sector fell by roughly 10 percent from $54 per hour to $49 per hour, a two-decade low.

Low productivity in the construction sector can be attributed to several key factors including:

• Significant Fragmentation among firms
• Limited Investment in R&D
• High reliance on labour relative to capital

Sources: Table 36-10-0480-01 (Statistics Canada); Economic Analysis and Modelling, HICC

Poor construction sector productivity represents a drag on the overall canadian economy

The construction sector’s lagging productivity has limited its economic contribution, with an estimated $410-$538 billion (3 percent) in additional GDP that could have been generated over the past decade if productivity had kept up with other sectors.

Sources: Table 36-10-0480-01 (Statistics Canada); Economic Analysis and Modelling, HICC

Despite the number of residential construction workers doubling between 2001 and 2023, housing starts and completions grew by only 50 percent and 40 percent, respectively.

As a result, the number of workers needed to build 100 homes rose 45 percent from 49 in 2001 to 71 in 2023.

The construction sector is home to high paying jobs but the benefits are not equal across different working groups 

Half of infrastructure jobs are concentrated in the construction industry

In 2023, infrastructure investment created 665,000 jobs (direct and indirect employment), of which 332,000 were in the construction sector. (Statistics Canada)

Among direct construction jobs, there were 58.2 million hours worked, with an average hourly wage of $35.5 (compared to a Canadian average of $33.6) in 2023.

Women had a lower average hourly wage than men - women earned on average $31.8 per hour, while men earned $36.1 per hour in 2023.

Since May 2015, the average wage for the unionized construction worker has increased by 20%, with particularly large increases in 2024.

There is untapped potential to diversify the construction labour force

The inclusion of certain groups to the labour force can help alleviate labour shortages and improve gender and visible minority participation; while ensuring that construction wages are distributed proportionally amongst Canadians.

Sources: Infrastructure Economic Account; Table 14-10-0037-01; Table 14-10-0064-01 (Statistics Canada)

Construction materials are an integral part of infrastructure delivery and subject to volatility

Key commodities such as cement, steel, lumber and aluminum form the foundation of infrastructure projects

• Cement is used in the construction of public transit railways; it is essential for building water treatment plants and is a main ingredient in concrete for residential building foundations.
• Steel is utilized in the manufacturing of rail tracks and train stations. It is important for pipelines and pumping stations in water infrastructure as well as for structural frames in building and residential construction.
• Aluminum is used in the manufacturing of buses and subway cars, while being an important element in ensuring water infrastructure's resistance to corrosion.
• Lumber is used in residential construction for framing as well as exterior and interior finishes.

Prices of construction materials are largely set by global markets and international supply and demand

• Increased demand from large countries (e.g. China, U.S.) creates competition for resources and drives prices up.
• Supply chain bottlenecks caused by transportation disruptions can lead to price fluctuations.
• Extreme climate events (e.g. wildfires) can also have an impact on material availability and costs.

Commodity prices for construction materials are inherently volatile

• Factors contributing to volatility include:
  • Changes in global economic conditions
  • Geopolitical events and trade policies
  • Fluctuations in supply and demand dynamics
• As such, volatile prices can force the construction sector to grapple with elevated project costs, project delays or abandonment.

Sources: Trading Economics, FRED Economic Data.

Cross-sectoral impacts of infrastructure - The environment

Infrastructure is crucial to mitigating and adapting to climate change

Infrastructure is highly affected by climate change – natural disasters are more frequent and severe

Resilient infrastructure can better withstand and protect communities from impacts of climate change.

Use of climate-resilient infrastructure offers much potential to reduce risk

Data, guidance, standards and codes can help inform how infrastructure is located, designed, built and operated – to adapt to a changing climate.

Sources: Canadian Disasters Database (Public Safety Canada, 2023); Canada's Top Climate Change Risks (Council of Canadian Academies, 2019).

Sources: Canadian Disasters Database (Public Safety Canada, 2023); Canada's Top Climate Change Risks (Council of Canadian Academies, 2019).

Infrastructure is highly impacted by climate change

Canada's infrastructure assets will fail earlier, require more investment in annual O&M, and will cost more to retrofit and replace due to changes in extreme heat and extreme precipitation.

Summary of forecasted additional costs for road assets by province

Province	Population	USL (Years)		O&M (% of CRV)		Renewal Cost (% added to CRV)		Retrofit Cost (% of CRV)
		Baseline	High emissions	Baseline	High emissions	Baseline	High emissions	Baseline	High emissions
BC	5,448,894	62	35	1.5%	4.2%	0%	31%	0%	34%
AB	4,695,290	62	38	1.5%	3.8%	0%	28%	0%	30%
SK	1,167,711	62	46	1.5%	3.0%	0%	21%	0%	22%
MB	1,397,017	62	46	1.5%	2.9%	0%	20%	0%	22%
ON	15,608,369	62	47	1.5%	2.9%	0%	19%	0%	20%
NB	834,691	62	35	1.5%	4.1%	0%	31%	0%	34%
PE	173,787	62	15	1.5%	6.3%	0%	53%	0%	58%
NS	1,058,694	62	15	1.5%	6.3%	0%	53%	0%	58%
NL	538,605	62	17	1.5%	6.1%	0%	50%	0%	55%
Canada	30,923,058	62	41	1.5%	3.5%	0%	25%	0%	27%
Note: Estimates based on comparing 1971-2000 baseline to 2071-2100 period. Analysis excludes territories and QC as analysis is ongoing.

Sources: FAO, Climatedata.ca, EAM calculations, Statistics Canada

Sources: FAO, Climatedata.ca, EAM calculations, Statistics Canada

Estimates based on comparing 1971-2000 baseline to 2071-2100 high emissions scenario.

Sources: FAO, Climatedata.ca, EAM calculations, Statistics Canada.

Resilient infrastructure requires efficient designs and planning 

In 2023, transportation and buildings account for approximately 34% of all greenhouse gas emissions

What is built defines the range of options available to individuals and companies (e.g., transit vs. roads).

How infrastructure is built defines the baseline emissions level, as inefficient designs become "locked in". More efficient future designs are expected to reduce the operational emissions intensity of infrastructure. Current estimates suggest that future efficient designs will reduce operation emissions to 50% from the current level of 89%.

Overall, the percent of municipal owners of infrastructure in Canada that consider climate change mitigation and adaptation in their decision-making process remains low, at less than half of owners for most asset categories.

Sources: Greenhouse Gas Emissions (Environment and Climate Change Canada, 2025); GHG Emissions from Building Construction (Green Construction Board, 2014); Canada's Core Public Infrastructure Survey (CCPI)

Sources: Greenhouse Gas Emissions (Environment and Climate Change Canada, 2025); GHG Emissions from Building Construction (Green Construction Board, 2014); Canada's Core Public Infrastructure Survey (CCPI)

Environmental improvements are being made during the construction of infrastructure assets

As investment increases, so do the levels of GHG emissions

However, greenhouse gas emissions per value added to the Canadian economy has decreased since 2009, suggesting that environmental improvements are being made during the construction of these assets.

Since 2009, the proportion of infrastructure industries’ clean inputs have increased, reaching 3.2% in 2024. Environmental and clean technology inputs have increased from $1.66 billion in 2009 to $4.24 billion in 2024.

• The proportion of clean input assesses whether an infrastructure asset was constructed using environmental and clean technology inputs (a process/product/service that reduces environmental impacts).

Sources: Infrastructure Economic Accounts (March, 2025)

Sources: Infrastructure Economic Accounts (March, 2025)

Cross-sectoral impacts of infrastructure - Our communities

Infrastructure impacts a community’s ability to participate in the economy and provides opportunities to underserved populations

Connectivity is an essential service and a prerequisite to participate in the digital economy:

• The CRTC’s target is to have 100% of homes and businesses have access to 50Mbps download and 10Mbps upload with unlimited data by 2031.
• While targets are on track, there is a large gap between First Nations communities and the rest of Canada.
• A gap remains between those households with access to ultra-fast speeds (Gigabit internet) and those without.

Strong communities requires easy access to social and health services, including high levels of proximity to public transportation in Canada's metropolitan areas:

• Canada's largest metropolitan areas have the most convenient proximity to public transportation at over 80% of the population within 500 m of public transit.
• Convenient access to public transport is generally lower in smaller metropolitan areas.

Sources: CRTC Communications Monitoring Report (Accessed April 2025); Statistics Canada Table 23-10-0313-01 Access to public transport by distance and public transport carrying capacity, geography, gender, and selected demographic and socio-economic characteristics

Sources: CRTC Communications Monitoring Report (Accessed April 2025); Statistics Canada Table 23-10-0313-01 Access to public transport by distance and public transport carrying capacity, geography, gender, and selected demographic and socio-economic characteristics

The state of infrastructure – A summary

• Canada’s infrastructure stock has grown to over a trillion dollars over the last decade. Ongoing investment is needed to offset the effects of depreciation.
• HICC has continued to fund the renewal and expansion of public transit in Canada to great success. However, since 2021, HICC has made significantly less contributions to traditional core infrastructure assets like highways, roads, and drinking water or wastewater assets. Condition data in these areas reflect the declining state of roads and linear water assets.
  • The expansion and alignment of economic-enabling infrastructure funding into roads, highways, and shortline rail can support resilience in the economy and renew existing infrastructure.
  • Existing infrastructure is vulnerable to the increasing frequency and intensity of natural hazards. Maintaining a presence in funding resilience is critical to the long-term viability of Canadian infrastructure.
• Continuing to generate infrastructure data is crucial for accurately assessing the economic importance of infrastructure spending in Canada, as it enables evidence-based decision-making, helps measure long-term impacts on productivity, growth, and quality of life, and ensures accountability in public investment.

Section C: State of Transit

Does Canada have the right kind of transit infrastructure to meet current and future needs?

• To answer this question, we need to understand both the state of our transit infrastructure and how it interacts with the surrounding housing, land-use, and other factors that affect the choices people make about getting around their communities.
• Canada’s current state of transit infrastructure can be assessed according to:
  • Stock: Accumulation of an inventory of tangible transit assets over time.
  • Investment: Transit spending for the purposes of construction of tangible assets.
  • Condition: Standardized scale used to define the current state of an asset (i.e., very good, good, fair, poor, or very poor).
• To understand other factors, we can consider factors such as access to transit and whether people live in transit- and active transportation-friendly communities or in more car-oriented areas.

Why is it important to invest in public transit and what is HICC's role?

• Investments in transit infrastructure provide direct and indirect economic benefits, including job creation linked to project design and construction, and additional economic activity that comes with greater mobility of people and goods once new infrastructure is in use.
• Access to transit and active transportation (cycling, walking) is an essential service across the country that can provide efficient and cost-effective transportation for people to access jobs and amenities like education, health care, and groceries. It also reduces traffic congestion and air pollution and saves on household costs.
• Local transportation is primarily a provincial, territorial, and municipal responsibility. Housing and other land-use decisions determine how far people need to travel from home to get to work, school, and other destinations, and what transportation modes they have available.
• More than four million people live in rural areas, where a lack of transit and safe mobility options disproportionally impact Indigenous Peoples, persons with disabilities, and the elderly.

Historically, public transit has been HICC’s largest area of investment, reflecting a high level of demand for investment across the country.

The Department funds the planning, construction, and procurement of public transit and active transportation infrastructure, ties funding to requirements to ensure investments are made under the right enabling conditions and to support housing objectives and works to support and engage with the sector through research, data, and partnerships. Given the scale of HICC investments in public transit over time, this support has now been situated within a standalone, permanent program.

The Canada Public Transit Fund provides permanent funding to address a range of transit needs

• Launched in July 2024, the Canada Public Transit Fund is Canada’s first permanent public transit funding – providing an average of $3 billion annually.
• Three overarching streams support communities of all sizes, with funding flowing beginning in 2026-27. This design also recognizes that a place-based approach works better to support rural transit, where fixed routes are not always the best solution.
• Designed with extensive engagement from stakeholders across the country.

The Canada Public Transit Fund builds on the $33 billion Investing in Canada Infrastructure Program, which will continue to flow funds to approved transit projects into the 2030s through its Public Transit Infrastructure and Green Infrastructure streams.

Current stock, investment and condition of transit infrastructure

Growing investment in a shared priority

• Total annual capital spending in the transit sector rose by 194%, from $5.59 billion to $10.84 billion, between 2014 and 2023. ^{Endnote *}
• Provinces and territories accounted for most capital spending in that period, averaging 59.3% annually, followed by municipalities at 27.7%, and the Government of Canada at 13%. ^{Endnote **}
• Based on replacement value, in 2022 local and regional governments owned 76% of public transit assets and 82% of active transportation infrastructure. ^{Endnote ***}
• This growing investment has helped increase the stock and improve the condition of transit assets for many systems across Canada.

Source: Canada's Core Public Infrastructure Survey, 2022. Data for provincial and territorial active transportation replacement value and regional organizations for transit and active transportation is imputed.

Source: Canada's Core Public Infrastructure Survey, 2022. Data for provincial and territorial active transportation replacement value and regional organizations for transit and active transportation is imputed.

Stock of transit infrastructure

Public transit infrastructure includes fixed assets and rolling stock. In 2022^{Endnote *}, we had:

• Over 7,100 single-track km of roads and over 1,500 km of rail, including 167 dedicated right-of-way bus lanes.
• Over 1,000 passenger stations and terminals, and over 30,000 transit shelters.
• Rolling stock of about 18,300 buses and 2,250 heavy rail vehicles (or subway railcars), and 376 light railcars.

Source: Statistics Canada, Inventory of core public infrastructure assets

Source: Statistics Canada, Inventory of core public infrastructure assets

Active transportation infrastructure includes sidewalks, bike lanes and parking, bikeshare stations, bikes and e-bikes.

In 2022, we had nearly 146,000 km of sidewalks across Canada and two-thirds of neighbourhoods had cycling infrastructure.

Condition of transit infrastructure (general)

• Public transit assets and active transportation had an estimated replacement value of almost $175 billion at the end of 2022^{Endnote *}. Many transit systems anticipate significant upgrades to maintain service and meet modern standards.
  • A sample of ten of the largest public transit agencies shows a combined required state of good repair spending target of approximately $20.6B (2023 to 2032).

Where asset condition is known:

• Transit-exclusive tracks and roads are mostly in fair, good, or very good condition.
• Most buses, railcars, and other “rolling stock” are good or very good condition, especially electric buses and hybrid vehicles.
• 17% of public transit assets and 42% of active transportation assets – $45.7B in replacement value – are in unknown physical condition.

Fixed transit assets are generally in good condition, but a sizeable amount of some asset classes are in unknown condition (percentage)

Note: This shows the physical condition rating of public transit assets, not including rolling stock. Bridges and tunnels are those exclusively used for public transit. This data is from Statistics Canada’s CCPI (2022). Table: 34-10-0284-01 (2024-10-21) Estimated replacement value of core public infrastructure assets, by physical condition rating

Current Outcomes

Transit is inherently linked to housing: More housing near transit means more riders

• Transit-oriented development, or TOD, is an approach to urban development that concentrates housing, businesses, and services near transit.
  • It increases access to transit, meaning more riders and makes transit more economical.
  • It enables the creation of more housing through density, which supports affordability.
• Although high-capacity transit, such as subway or light rail lines, offers the greatest opportunities for TOD, extensive urban bus networks are also key to enabling higher-density development.
  • 81% of urban dwellers overall live within 500 metres of a public transit station or stop.
  • 98% of urban dwellers living in a five-storey or higher apartment building were within 500 metres.
• Transit-oriented development is therefore a key tool for tackling Canada’s housing supply and affordability challenges, especially as networks continue to expand.

Source: Statistics Canada, How far to the nearest transit stop?

Density Near Transit vs. Average City Core Density

Region	Average Population Density (Census Subdivision)	Density within 800M of Transit Station
Vancouver City	5,750	6,482
Toronto City	4,428	8,246
Montréal Ville	4,833	6,756

Source: Statistics Canada: General Transit Specification Feed, Census 2021, Census of Population 2021, Dissemination Block Boundary File; HICC calculations.

Land-use patterns combine with other factors to favour car travel, though people had increasingly been shifting to transit

• Even in Canada’s largest urban centres, most people live in suburbs or exurbs outside the city core with a high per-rider cost to operate transit.
• This results in high costs from car ownership, congestion, emissions, and more.
  • In the fourth quarter of 2024, households spent over $56.3 billion to purchase, park, maintain, fuel, and insure personal vehicles (compared to $1.3 billion on urban transit).
• This development pattern poses challenges for increasing transit and active transportation use, though it is possible with sustained investment.
• Driven by urbanization and these types of costs, the share of commuters using public transit or active transportation was growing steadily prior to the COVID 19 pandemic.

Source: Canadian Suburbs Atlas; 2021 Census, Statistics Canada.

Historical Distribution of Main Commuter Modes

Year	Car/truck/van	Public Transit	Active Transportation	Other
2024 Endnote *	81.5%	11.4%	6.0%	1.1%
2021 Endnote *	84%	7.8%	6.1%	2.1%
2016 Endnote *	79.4%	12.6%	6.8%	1.2%
2011 Endnote **	79.7%	12%	7%	1.2%

Post-covid recovery and high costs are key challenges today

• Transit ridership and revenue collapsed during the COVID-19 pandemic and have been slow to recover—since then, transit agencies of all sizes have struggled with operational shortfalls.
• In 2019 fare revenues covered 51% of all transit operations costs, compared to 32% in 2022.
• Canada’s January 2025 data shows ridership was up from the previous year, but still 82.2% of January 2019; operating revenue was about 90.7% of January 2019.

Source: Statistics Canada Monthly Ridership Data.

• Canada is one of the costliest countries in the world when it comes to building transit. A 2024 report^{Endnote *} ranked Canada 9th highest out of 60 countries for average cost-per-kilometre of new transit.
• Both hard cost (e.g., overbuilding, construction methods, customizations) and soft cost (e.g., reliance on private sector consultants, high contingency budgets) play a role.

Source: Aevaz, R. et al. 2022; Goldwyn, E et al. 2023; Wickens, S. 2020.

Future infrastructure needs

Canada’s growing population will sustain demand

• Statistics Canada expects Canada’s population to grow from 39.3 million in 2023 to 45.35 million in 2030, which HICC expects to mean an increase from 15.74 million commuters to 17.61 million.
• Larger urban areas are growing faster than Canada as a whole (15.3% since 2014) with small cities (9%) and rural communities (6.5%) seeing modest growth.
  • This will likely mean more ridership, as the higher housing density in urban areas is associated with higher transit use.
• Transit agencies are anticipating some $150B in spending on network expansion over the next decade; other methods of estimation also show high expected spending.

Estimation based on three contingencies of capital need result in a mid-scenario picture of substantial growth in demand for public transit infrastructure ($ in Billions)

Need Scenario	Montréal	Vancouver	Toronto	Rest of Canada	Total
10-year historic capital expenditure (2013-2023)	11.1	3.4	50.1	14.9	79.5
(1) Demographic, Social and Housing Density Demand (2025-2034)	16.6	8.2	74.7	30.2	129.8
(2) Target 22% sustainable commute share (2025-2034)	18.6	8.4	70.3	29.8	127.1
(3) Stated Capital Investment Plans (2025-2034)	19.6	11.4	94.8*	27.3	153.1
Note: Investment plans include 12 transit agencies representing > 95% of historic investment.

Growing transportation emissions point to continued need for investment in sustainable modes such as transit

Passenger modal shift is essential for achieving climate targets require continued investment in transit and active transportation.

• Transportation is projected to be Canada’s largest emissions source in 2030.
• Electrification is not moving fast enough to meet near-term climate targets alone.
• Modal shift remains central: vehicle kilometres travelled (VKTs) drive emissions, and mode shift means fewer VKTs.

Emissions can be further reduced through transit electrification.

• ~500 ZEBs are currently on the roads, with thousands more funded or on order as the industry continues to transition.
• Canadian bus manufacturers are expanding domestic production of ZEBs, but the industry continues to face supply chain concerns and delays.

Source: Canadian Suburbs Atlas; 2021 Census, Statistics Canada.

Source: Canadian Suburbs Atlas; 2021 Census, Statistics Canada.

The state of transit – summary

• Public transit and active transportation infrastructure are critical to urban mobility, affordability, and prosperity and inherently linked to housing.
• Canada’s transit networks have grown substantially and are in a good state of repair following a decade of sustained investment, though agencies continue to face revenue challenges and financial pressures on operations post-COVID-19.
• Need for federal funding remains strong, as transit agencies plan significant investments in expansion and in maintaining good repair of recently expanded networks over the next decade, underpinned by population growth, urbanization, and concerns around congestion and emissions.
• HICC has established a solid and flexible base to support transit investments, helping to meet demand and achieve broader objectives related to housing, climate change, and access for transit-dependent populations.
• There are opportunities for collaboration among levels of government, stakeholders, and partners to improve mobility outcomes across Canada and ensure value for money of planned investments.

Annex: Regional Lens

Major rail transit investments are planned or underway across Canada

Rail investment in detail

Rail investments

Title	Region	Province	Federal Program Contribution
Ontario Line	Toronto	ON	$4,020,674,386
Scarborough Subway Extension	Toronto	ON	$2,258,400,000
[redacted]	[redacted]	[redacted]	[redacted]
Revised Montreal Metro Blue Line Extension	Great Montréal Area	QC	$1,956,297,419
GO Transit Expansion Project	GTHA	ON	$1,899,315,000
Eglinton Crosstown West Extension	Toronto	ON	$1,877,596,120
Hamilton Light Rail Transit Project	GTHA	ON	$1,700,000,000
Calgary Green Line Light Rail Transit Project	Calgary	AB	$1,530,000,000
Québec City Tramway Project (TramCité)	Québec City	QC	$1,440,000,000
Surrey Langley SkyTrain	Greater Vancouver Area	BC	$1,282,468,566
Ottawa Light Rail Transit (LRT) Stage 2	NRC	ON	$1,091,150,000
Edmonton Valley Line West Light Rail Transit (LRT)	Edmonton	AB	$948,560,000
Millennium Line Broadway Extension (TransLink)	Greater Vancouver Area	BC	$888,357,608
[redacted]	[redacted]	[redacted]	[redacted]
Bloor Yonge Capacity Improvement Project	Toronto	ON	$500,000,000
Expo and Millennium Upgrade Program	Greater Vancouver Area	BC	$493,320,000
Edmonton Capital Line South Extension - Phase 1	Edmonton	AB	$424,240,000
Finch West Light Rail Transit Project	Toronto	ON	$333,000,000
Procurement of 153 new Azur subway cars	Great Montréal Area	QC	$215,042,302
Train Control System on the Blue Line	Great Montréal Area	QC	$202,851,957
Hazel McCallion LRT Extension in Brampton	GTHA	ON	N/A
Note: Hamilton Light Rail Transit Project and Hazel McCallion LRT Extension in Brampton are priority announced but not yet approved. No allocation has been announced for Brampton.

Regional transit – System snapshot

Regional transit

	Access to transit (2024Endnote *)	Ridership	Transit capital spending (2023Endnote **)	Fleets (2023Endnote **)
Toronto Region	84.1 per cent of the population lived 500 metres from a public transit stop in the region	The TTC and Metrolinx had nearly 423.6 million 70.3 million passenger trips, respectively Endnote *	Total capital expenditures in the Greater Toronto and Hamilton Area were $8.16 billion	Greater Toronto and Hamilton Area active fleets had 4,274 buses, 822 heavy rail, and 206 other vehicles
Montréal Census Metropolitan Area	85.8 per cent of the population lived 500 metres from a public transit stop in the region	In 2024, la Société de transport de Montréal (STM) had almost 392 million passenger trips Endnote *	Total capital expenditures in the Greater Montreal area were $196.4 million	Greater Montreal active fleets had 2,815 buses and 468 heavy rail vehicles
Metro Vancouver	84.3 per cent of the population lived 500 metres from a public transit stop	In 2024, TransLink had over 239.3 million passenger trips Endnote *	Total capital expenditures in Metro Vancouver were $620.6 million	Metro Vancouver active fleets had 1,747 buses, 378 heavy rail, and 4 ferries
Calgary	78.9 per cent of the population lived 500 metres from a public transit stop	In 2024, Calgary had close to 103 million passenger trips Endnote *	Total capital expenditures in Calgary were nearly $323.4 million	Calgary Transit active fleets had 1,127 buses and 94 light rail
National Capital Region	76.6 per cent of the population lived 500 metres from a public transit stop	In 2023, the National Capital had close to 80.7 million passenger trips Endnote **	Total capital expenditures in the National Capital were over $806 million	National Capital active fleets had 1,128 buses and 48 light rail
Edmonton	74.4 per cent of the population lived 500 metres from a public transit stop	In 2024, Edmonton had nearly 61 million passenger trips Endnote *	Total capital expenditures in Edmonton were over $110.5 million	Edmonton Transit Service active fleets had 1,098 buses and 217 light rail