Canada experienced an average year-over-year construction cost increase of 4.70% (above the national average of 4.41%). These cities include Toronto (4.90%) and Calgary (4.50%).
Alberta municipalities issued $1.9 billion in building permits in Q4 2025, a 4.2% increase from the year prior. Housing activity remains strong heading into 2026: January starts reached 46,143, the third‑highest total ever for that month. Although the six‑month moving average shows some cooling due to slower population growth and rising inventory, starts are still projected to average 45,000 in 2026, which is 33% above the ten‑year average. Calgary accounted for 56% of January starts, Edmonton 31%, and roughly 80% of new units were multifamily. Alberta’s 2026 budget directs significant capital toward Calgary, including $1.1 billion over three years for LRT expansion—with an airport connection—alongside $266 million for upgrades to Deerfoot Trail. Additional funding will support schools, healthcare facilities, and broader municipal infrastructure.
In Ontario, early 2026 data shows residential construction stabilizing. January housing starts rose 12% year‑over‑year, led mainly by rental-oriented multi‑residential projects after several years of declines linked to weak pre‑construction sales. Despite this improvement, the province remains behind its long‑term target of 1.5 million new homes by 2031. Municipal housing goals increased from 150,000 in 2025 to 175,000 for 2026 as part of Ontario’s incentive‑based strategy. The ICI sector also strengthened at the end of 2025: Q4 permits grew 11%, driven by an 18% rise in industrial permits and a 12% increase in commercial activity. Overall ICI investment reached $35.36 billion in 2025—up 6.1% from 2024—with notable growth in office and school construction in Kingston, Kitchener‑Cambridge‑Waterloo, and London.
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