Resources, Defense Lead Canada’s US$4.7 Trillion 2050 Infrastructure Outlook

Resources top budget spending allocation

Resource infrastructure represents the single largest allocation of the country's long-term spending model, coming in ahead of transportation and social infrastructure.

Annual spending on resource-related infrastructure, which includes networks for the extraction and transport of metals, minerals, oil and gas, is projected to climb from US$53 billion to US$63 billion by 2050.

While oil and gas assets continue to command over 72 percent of this allocation, expenditures for metals and minerals are projected to steadily expand through 2050 with 26.22 percent of the budget (US$16.6 billion).

Globally, Canada and Australia are the only advanced peer economies projected to increase their annual resource infrastructure spending between 2024 and 2050. Conversely, the US, UK and Germany are expected to see their annual resource infrastructure spending decline over the same period.

This heavy resource concentration exposes a lack of diversification in other high-growth sectors.

For instance, nuclear power infrastructure is expected to grow just 11 percent in Canada by 2050, compared to 17 percent in the US and 45 percent globally. Canada also trails peer nations in vital trade connectors: domestic airport infrastructure spending will grow 78 percent, falling short of the 99 percent growth projected for the US and 93 percent globally. Canada is similarly projected to trail the UK and Australia in attracting data center investment.

In response to these gaps, Canadian policy is shifting to address regulatory bottlenecks.

The federal government has proposed a one year review target for major developments, while provinces like Alberta have introduced legislation such as Bill 30 to impose a 120 day approval window for industrial and mining applications.

The defense surge and gaps in capital

While resources command the largest share, defense infrastructure is Canada's fastest-growing segment.

Defense infrastructure outlays are projected to jump 389 percent between 2024 and 2050, primarily driven by NATO spending commitments and heightened Arctic sovereignty concerns. This expansion aligns with Canada's pledge to allocate an additional 1.5 percent of gross domestic product (GDP) to critical security assets.

However, the report warns that public balance sheets are insufficient to fund this US$4.7 trillion pipeline.

For that reason, the report's authors believe that private institutional capital and blended public/private financing structures should be deemed essential to meet the forecast spending.

Currently, Canada allocates 6.6 percent of its GDP to infrastructure, trailing high-performing peer nations that average 7.4 percent. Closing this gap to protect long-term economic competitiveness will require an additional US$34 billion in annual expenditures through 2050.