Economic impact of public infrastructure investments
Public infrastructure investments overview
Public and private investments in infrastructure have undergone shifts over time. In 2022, public investments accounted for 69 per cent of total infrastructure investments, marking a notable increase from the 63 per cent share recorded in 1981. Conversely, private investments decreased to 31 per cent from 37 per cent in 1981. In 2022, this resulted in $76.2 billion in public investments and $35.9 billion in private investments out of a total infrastructure investment of $112.1 billion in 2022 [Chart 4: Public Investments by Share].
Public investments in infrastructure
Public investments, supported by all levels of government, cover a range of asset classes [Table 1: Public Infrastructure Assets]. Some asset classes rely heavily on private investments like communication networks and oil and gas engineering construction, while others, such as institutional buildings, sewage infrastructure and transportation engineering infrastructure, largely depend on public investments.
Distribution and impact of public investments
In 2022, public investments in infrastructure reached $76.2 billion, with significant contributions from municipal (28 per cent), provincial (20.2 per cent), and government business enterprises (24 per cent) [Chart 5: Public investment distribution]. In terms of asset function, investments were allocated across transportation (37 per cent), fuel and energy (18 per cent), education (14 per cent), health (9 per cent), environmental protection (7.3 per cent), and housing (6.4 per cent) functions, collectively representing 92 per cent of all public investments.
Economic contribution of public investments
The economic contribution of infrastructure investments is estimated in terms of value added (direct and indirect impact), compensation of employees, and job creation. In 2022, the value added by private and public investments amounted to $83.4 billion, with the construction industry attaining $45 billion (54 per cent of total share). The remaining share of value added extends across other industries: information, finance, and professional sectors accounted for 19.3 per cent of the value added, while manufacturing accounted for 10.4 per cent. Total investments
in infrastructure generated approximately 675,370 jobs and $51.7 billion in wages across all industries in Canada, with construction accounting for a significant portion—339,000 jobs (50.2 per cent) and $28.5 billion (55.1 percent) in compensation.
Public infrastructure investments significantly contribute to Canada’s economic landscape. Public investments in infrastructure generated a total added value of $56.6 billion (68 per cent of total), contributing $30.5 billion in
added value in construction, $18.9 billion in compensations, and 247,000 construction-related jobs.
Asset-class specific impact
Public investments in infrastructure exhibit varying impacts across asset classes. Certain asset classes contributed significantly to construction—electric power infrastructure ($6.6 billion impact, $3.2 billion in wages, and 37,375
jobs), institutional buildings ($8.6 billion impact, $5.5 billion in wages, and 80,320 jobs), and transportation engineering infrastructure ($10.6 billion impact, $6.8 billion in wages, and 91,145 jobs) made substantial contributions to the added value, compensations, and job creation [Chart 6: Public investment by asset impact].
Housing infrastructure
A recent study by the Federation of Canadian Municipalities (FCM) concluded that each new housing unit in Canada requires an average investment in public infrastructure of $107,000 [FCM Public Infrastructure]. Meanwhile, the
Canadian Mortgage and Housing Corporation (CMHC) forecasts that the construction of 5.8 million new homes is needed by 2030 across Canada to rebalance housing supply and demand dynamics [CMHC Housing Shortages in
Canada]. As a result, the necessary infrastructure fundings required to close the housing gap would represent an investment of $620 billion.