Skip To Content

Webinar key takeaways: Will infrastructure spending be part of Canada’s economic recovery plan?

Author(s): Chris Bennett, Richard Wong

Oct 16, 2020

On September 23, 2020, Osler hosted a webinar, “Will infrastructure spending be part of Canada’s economic recovery plan?” featuring Osler special advisor and immediate past Governor of the Bank of Canada, Stephen Poloz, the Chair of Osler’s Financial Services Practice, Chris Bennett, and the Chair of Osler’s Construction and Infrastructure Group, Richard Wong.

Reviewing the current state of play regarding the role of infrastructure investment in driving Canada’s economic recovery, our experts looked at how our current situation compares with other historic economic events, including the 2008 financial meltdown. They identified a number of emerging themes shaping shovel-worthy investment opportunities and decisions, such as resilience, capacity and innovation, and examined opportunities and challenges facing our clients. They also discussed trends in infrastructure spending, the pipeline of projects being put forward and how the capital markets, procurement bodies and regulatory frameworks are adapting to facilitate the next infrastructure boom. All the recovery initiatives discussed in the webinar are in addition to the federal government’s priorities for recovery from the COVID-19 pandemic as outlined in the Speech from the Throne delivered on September 23, 2020. Below are key takeaways from the webinar.

Key takeaways

  • Outlook: Overall, the outlook for the construction and infrastructure sector is positive. Canadian governments have put a raft of stimulus programs in place that are attracting both local and international interest, but success hinges on a number of factors: stronger provincial and federal collaboration; private sector engagement regarding funding, capacity and expertise; partnership with entities such as the Canada Infrastructure Bank; and innovation from construction and infrastructure companies, including modular construction, AI and automation. Our outlook sees the overall Canadian asset mix pivoting to green, including electric cars, battery storage, renewable energy projects, sustainable housing and upgrades to hospitals and transit.

  • Investment factors: A number of considerations are influencing investment decisions: resiliency, capacity, innovation, sustainability and the minimization of development hurdles. In response, the government of Canada is adapting the $33 billion-plus Investing in Canada Infrastructure Program to respond to the impacts of the COVID-19 pandemic. The program, delivered through bilateral agreements with provinces and territories, is being adjusted to add flexibility, expand project eligibility and accelerate approvals. A new temporary COVID-19 Resilience stream, with more than $3 billion available in existing funding, has been created to provide provinces and territories with added flexibility to fund quick-start, short-term projects that might not otherwise be eligible under the existing funding streams.

  • Elements for success: Politics, at all levels of government, is a key factor influencing infrastructure investment. Governments will require “announceables” — shovel-worthy projects — and collective accountability and visible delivery from the industry to achieve job creation and growth. Private capital, such as Canadian pension funds, will be more important to spur recovery than in the last big downturn, when the public sector was the principal capital provider.

  • Challenges: While the sector in 2008 had more available capacity and a focus on “hard infrastructure” such as roads, bridges, tunnels and hospitals, the sector today is already quite “hot”. The sector therefore needs to increase capacity to deliver through innovation and access to a skilled workforce, possibly through the redeployment of workers from other sectors that may face a declining market, such as Canada’s oil and gas industry. Hurdles include government delays in project approvals, interprovincial protectionism and the impact of the COVID-19 pandemic. A second wave of the pandemic could cause further delays and cost increases but, based on the experience of the initial March 2020 shut-down, construction-related businesses were largely exempt as essential businesses and were able to continue.

  • Opportunities: The sector is at a turning point and can seize opportunities that are both regenerative and potentially transformative of the economy. Opportunities will arise as the definition of shovel-worthy projects is shifting and asset-classes are going to vary from past experience due in large part to forces, including climate change, innovation, and technology, that are fueled by creativity and innovation within the industry. This is expected to result in opportunities to bring various players together (e.g., developers, contractors, governments and financers) to drive infrastructure development and economic growth. Behind the scenes, we have seen many of our clients and their constituent sector industry organizations, ranging from energy storage, telecom, transit, healthcare, manufacturing and export, furiously advocating for their sectors as directly cranking the engine of economic recovery. We expect a lot of potential opportunities for capital markets and industrial players to come together and actively propose new ideas to government and private sector participants.

View a replay of the webinar.


“Webinar key takeaways: Will infrastructure spending be part of Canada’s economic recovery plan?” provides general information only and does not constitute legal or other professional advice. Specific advice should be sought in connection with your circumstances. Remarks by Stephen Poloz reflect his own personal views and do not represent the views of the Bank of Canada, his former office, the Government of Canada or any of its departments. His presentation was based on data and information that are publicly available. For more information, please contact Chris Bennett or Richard Wong.