Capital and Repair Expenditure Survey (2026)

Statistics Canada released the results of its latest 2026 survey of non-residential capital and repair expenditures (a.k.a., the CAPEX survey). This year's survey offers a clearer view of investment plans compared to last year's, as the sampling period now better captures the trade headwinds and pressures affecting businesses and government over the last year.  

Total nominal capex spending growth is expected to cool to 3.7% in 2026, a step back from the realized 4.7% spending growth in 2025 (previously projected at 5.5%). This would mark a sixth consecutive annual increase. Compositionally, spending intentions are shifting away from machinery and equipment (-0.6%) and toward buildings and infrastructure (+5.9%), with governments doing more of the heavy lifting than businesses. 

Indeed, public sector investment remains a stabilizing force to Canada's total investment picture. Governments and public institutions plan to increase capital spending for a tenth consecutive year by 5.1% this year. This follows a much stronger expansion in 2025 (13.5% actual vs 5.7% planned). Public administration and utilities investment continue to underpin growth, supported by infrastructure programs and investments aimed at expanding and modernizing electricity systems. 

This is helping to counterbalance still-cautions private sector behaviour, with businesses reporting gains in nominal capex intentions at a tepid 2.8% for 2026. This still marks a modest recovery from last year's spending, which recorded a slight contraction against last year's expectations for moderate growth. We expected private investment outcomes to worsen in 2025 compared to last year's survey, as projections were made before tariffs were implemented. Further, private sector intentions this year coincides with the outlook for machinery and equipment investment reported in the Bank of Canada's Q5-2025 Business Outlook Survey, which has shown a slight improvement in recent quarters.

The modest uptick in 2026 private sector intentions is heavily concentrated in a small number of capital intensive industries: 

• Resource related sectors, including mining and oil and gas (+6.8%), are expected to rebound after a pullback in 2025, supported in part by higher commodity prices.
• Transportation and warehousing (10.1%) stands out as a major source of investment growth, reflecting sustained spending on logistics and network capacity. 
• Utility intentions (+9.7%) are being driven from electricity demand and grid investment.
• In contrast, manufacturing investment intentions (-0.3%) is expected to decline further in 2026, as trade pressures and project delays weigh on capital outlays in several subsectors.
• Many service-oriented sectors are either flat or seeing investment cutbacks. Exceptions include accommodation and food services (+19.4%), and wholesale trade (+6.1%).

From a regional perspective, total capital spending remains uneven:

• Capex is expected to grow in 7 of 10 provinces, led by Ontario (+7%), Alberta (+5.9%), and Quebec (+3.1%). Meanwhile, Newfoundland (-13.5%), Manitoba (-2.5%), and Saskatchewan (-1.1%) are slated to reduce capex investment. 

Ontario's solid gains are being supported by infrastructure, transportation, and electricity‑related projects, while smaller jurisdictions show more volatile investment patterns. Overall, the provincial distribution reinforces the view that national capital spending growth is being driven by a limited number of regions and large projects rather than broad‑based private investment. 

Forecast Implications and Bottom Line

The survey has something in it for optimists and pessimists. On the one hand, these data suggest that private sector investment should turn the corner after a difficult year.  But on the other, the downgrade to 2025 flows leave investment at a weaker level, particularly in trade impacted sectors like manufacturing. Ongoing and unpredictable threats from President Trump are likely to create ongoing uncertainty, which will continue to limit the extent of any near-term rebound in 2026.  These data are broadly in line with our December for real private non-residential investment.  

Disclaimer

This report is provided by TD Economics. It is for informational and educational purposes only as of the date of writing, and may not be appropriate for other purposes. The views and opinions expressed may change at any time based on market or other conditions and may not come to pass. This material is not intended to be relied upon as investment advice or recommendations, does not constitute a solicitation to buy or sell securities and should not be considered specific legal, investment or tax advice. The report does not provide material information about the business and affairs of TD Bank Group and the members of TD Economics are not spokespersons for TD Bank Group with respect to its business and affairs. The information contained in this report has been drawn from sources believed to be reliable, but is not guaranteed to be accurate or complete. This report contains economic analysis and views, including about future economic and financial markets performance. These are based on certain assumptions and other factors, and are subject to inherent risks and uncertainties. The actual outcome may be materially different. The Toronto-Dominion Bank and its affiliates and related entities that comprise the TD Bank Group are not liable for any errors or omissions in the information, analysis or views contained in this report, or for any loss or damage suffered.