Canada’s Aging Infrastructure Faces Decline as Investment Slows

Canada’s aging infrastructure is becoming a growing concern as investments in roads, schools, shopping centers, and equipment continue to lag behind. According to recent data from Statistics Canada, the average age of the country’s non-housing capital stock reached just over nine years in 2023, leaving 63.3% of its “useful” life remaining. This marks the eighth consecutive year of decline in the remaining useful service life ratio, signaling that much of the nation’s infrastructure is becoming outdated.

The remaining useful service life ratio, which gauges the economic benefit left in capital assets, suggests that new investments are urgently needed. Since 2015, the ratio for natural resources—such as oil, gas, and metals—has notably decreased, with the retail sector experiencing the sharpest decline in 2023.

Canada’s Aging Infrastructure Faces Decline as Investment Slows

Despite promises from Prime Minister Justin Trudeau’s government to prioritize infrastructure spending upon taking office in 2015, the latest figures indicate that both public and private investment in the sector has not kept pace with the aging infrastructure. While billions have been toward public transportation and other initiatives, the overall capital stock is deteriorating, with no clear solution in sight.

In a related report, Finning International, which sells and services Caterpillar construction equipment, revealed that growth in Canada was weaker than expected due to reduced infrastructure spending. This is further evidence of the negative impact that aging infrastructure is having on the broader economy.

Statistics Canada also reported that the value of Canada’s gross non-residential capital stock grew by 1.5% in real terms in 2023, driven by engineering construction and intellectual property products. However, the machinery and equipment sector saw a decline for the fourth consecutive year, underscoring the growing challenge of maintaining infrastructure and modernizing essential services across the country.

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