Ontario Construction Outlook Shows Promising Growth Through 2035

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BuildForce Canada's latest report indicates a significant rise in construction activity in Ontario, particularly in residential construction, projected to continue until 2035 despite short-term challenges.

BuildForce Canada has published its annual reports on the future of construction and maintenance, focusing specifically on Ontario's residential and non-residential sectors for the period from 2026 to 2035. The findings highlight an overall expected increase in construction activity, largely driven by a combination of strong residential construction and high levels of non-residential investment, which is fueled by a variety of major institutional, commercial, industrial, and civil engineering projects. Although a temporary slowdown in residential construction is anticipated due to uncertainties stemming from the ongoing tariff disputes between Canada and the United States, a sustained growth phase is expected to commence in the medium to long term. Notably, investment in new housing construction is forecasted to rebound by 2028, while renovations and maintenance activities in the residential sector are predicted to see continuous growth throughout the forecast period.
By 2035, residential construction employment in Ontario is projected to increase by 11% compared to 2025 levels, with the most significant gains anticipated in new housing and renovation activities. In contrast, non-residential construction presents a slightly different outlook. Since 2022, investment levels have risen sharply and are expected to continue this upward trend into the late 2020s, maintaining high levels into the early 2030s. Specifically, investment in institutional, commercial, and industrial construction is set to increase steadily, bolstered by planned projects in healthcare, education, and government buildings across various regions.
The forecast indicates that non-residential construction activity will peak around 2030 before entering a period of moderation. Commercial building activity is expected to flourish, primarily due to previous high population growth rates, while the industrial sector's outlook remains uncertain. Engineering construction, however, is anticipated to grow steadily, driven by significant transit projects, mining operations in Northern Ontario, and various utility-sector investments, including nuclear generation and refurbishment initiatives. In terms of transportation infrastructure, growth in road, highway, and bridge construction is expected to be more modest.
By 2035, the non-residential construction workforce is projected to expand by 5% compared to 2025 levels. Overall, the industry faces a significant challenge as an estimated 92,000 workers are expected to retire by 2035. To meet the increasing demand, the sector will require an additional 34,100 workers, leading to a total hiring need of approximately 126,100 workers by 2035. The influx of about 98,800 new entrants under the age of 30 may help alleviate this shortfall, yet a potential deficit of 27,300 workers could remain.
Irwin Bess, the executive director of BuildForce Canada, articulated that Ontario's construction outlook demonstrates robust underlying demand across both residential and non-residential sectors. He noted that while the residential sector may experience short-term constraints due to factors like tariff disputes, reduced immigration levels, and an excess of unsold multi-unit dwellings in some areas, the long-term outlook remains strong. Conversely, activity in the non-residential sector is expected to rise through the late 2020s and remain elevated until the end of the forecast period, as numerous significant projects progress throughout all six of Ontario’s regions.
The report provides detailed insights into each of Ontario's six regions—central, eastern, Greater Toronto Area, northeastern, northwestern, and southwestern—each exhibiting unique labor market conditions. In Central Ontario, for instance, residential activity is anticipated to rebound significantly after 2027, while non-residential work is expected to rise between 2027 and 2031, particularly in institutional and industrial projects. Employment in both sectors may increase by 21% and 11%, respectively, by 2034.
Eastern Ontario is projected to see growth in new housing starting in 2027, alongside a historically high level of non-residential construction, which is expected to peak in 2030. Employment gains in this region are expected to reach 10% and 7% for residential and non-residential sectors, respectively, by 2035.
In the Greater Toronto Area, construction activity contracted in 2025 due to high costs and unsold residential inventory, but non-residential construction remains strong due to ongoing major projects. After 2028, residential investment is projected to grow, while non-residential activity is expected to taper off as major projects conclude. Employment in both sectors is expected to rise by 5% and 4%, respectively, compared to 2025 levels.
Northeastern Ontario anticipates growth in residential construction but a slight decline in non-residential investment. By 2035, residential employment is expected to contract by 3%, while non-residential employment may increase by 1%.
Northwestern Ontario's residential sector is projected to grow, particularly in new housing, while non-residential investment is expected to peak in 2028 before declining. Employment is forecasted to contract by 2% in residential and 5% in non-residential sectors.
Finally, Southwestern Ontario is expected to see a decline in non-residential construction after 2027, although the ICI building segment is projected to remain strong, offsetting some slowdowns in engineering construction. The residential sector is expected to experience significant growth post-2026, with employment rising by 10% in residential sectors but declining by 2% in non-residential sectors.

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