Wedoany.com Report on Mar 9th, According to the latest economic update released by the Ontario Construction Secretariat (OCS), capital spending intentions in Ontario's urban infrastructure sector are projected to rise by 12.2% in 2026, reaching $84.8 billion, with this growth primarily driven by the public sector. The report shows that public sector spending intentions for urban infrastructure increased by 16.2% compared to last year, while private sector intentions grew more moderately, at 6%, reaching $31.8 billion.
The report notes that the gap between public and private investment in urban infrastructure has widened since the pandemic. During periods of slower economic growth, public spending has consistently acted as a "stabilizing force" for Ontario's construction industry. The public sector accounts for 62% of total urban infrastructure capital spending intentions for 2026, and public capital expenditure has shown a strong upward trend, with recent annual growth rates exceeding the ten-year average of 10.8%. The current double-digit growth of 16.2% indicates a robust project pipeline and continued government support for urban infrastructure development.
In terms of sector distribution, transportation and warehousing, public administration, and utilities lead urban infrastructure capital spending intentions for 2026, each at approximately $17 billion. These three sectors combined account for nearly 60% of planned total spending. Manufacturing, educational services, and healthcare follow closely. In terms of growth, healthcare stands out with a 25.2% increase compared to 2025. Transportation grew by 22.6%, and public administration by 18.9%. Compared to last year, some sectors experienced declines, including retail trade, corporate management, administrative and waste services, as well as arts and entertainment.
The 2025 Ontario Budget outlines a 10-year capital plan with a nominal total of $223.1 billion, or $203.4 billion in real 2025 dollars. Throughout the plan, 86% is allocated to provincially owned capital assets, such as hospitals, schools, and highways, which are significant components of urban infrastructure, while 14% reflects capital transfers to external entities. The province is expected to bear 83% of the total cost, with the remainder coming from federal, municipal, and third-party contributions. From a construction perspective, 57% of the planned expenditure is dedicated to expansion projects for urban infrastructure, with the remaining 43% allocated to the renewal and modernization of existing assets.
Sector-wise, healthcare and transportation account for the largest share of total urban infrastructure investment, followed by highways and transportation, education and other infrastructure, with higher education, justice, and social infrastructure representing smaller shares. This 10-year plan is 17.9% higher than the 2019 capital plan, although it aligns closely with actual spending over the past decade, with a deviation of -0.8%. Overall, the plan indicates sustained and historically high levels of public urban infrastructure spending, with a significant portion dedicated to system expansion while continuing to invest in renewal.
