Capital and Repair Expenditure Survey (2025)

Highlights

• Statistics Canada released the results of its latest 2025 survey of non-residential capital and repair expenditures (a.k.a., the CAPEX survey). The survey was taken between September 2024 and January 2025, meaning that it misses the bulk of the more recent ramp up in tariff threats by President Trump. 
• Nominal capex spending growth in 2025 is expected to accelerate to 5.5% relative to last year's levels. This would mark the fifth consecutive annual increase.  
• Capex is expected to grow in 8 of 10 provinces, led by Saskatchewan (+10.8%), New Brunswick (+10%), and Ontario (+8.7%). Meanwhile, PEI (-1.3%) and Newfoundland & Labrador (-5.1%) are slated to reduce capex investment. 
• This year, private sector capital spending is projected to increase by 5.5% following a meager gain of 0.1% the year prior. Meanwhile, public sector organizations plan to invest $151.6 billion (+5.7%), following eight years of consecutive growth. 
• By sector, investment growth in manufacturing (+15.5%) is expected lead the way and surge to its highest level on record. Transportation equipment, chemical, and electrical manufacturing projects in Ontario, Alberta, and Saskatchewan are anticipated to drive the expansion.
• Capital spending in the mining, quarrying, and oil & gas sector is expected to reach $64.4 billion in 2025, accounting for the largest share (over 15%) of this year’s total capex plans.

Key Implications

• The survey indicates that businesses and governments appear to be upbeat about investment outlays for the coming year as interest rate easing creates a more accommodative borrowing environment.  
• The strength in private sector intentions coincides with the outlook for investment in machinery and equipment, reported in the Bank of Canada's Q4-2024 Business Outlook Survey, which reached its highest point in over two years. 
• The timing of this year's survey however, only partially captures tariff threats imposed by Trump beginning in late 2024. The bulk of President Trump's tariff plan and implementation strategy arrived in February 2025, making it highly likely that investment intentions, especially on the private side, have soured since the survey was taken.  
• Indeed, a $2-billion investment in canola processing plants in Saskatchewan has been put on hold as uncertainty over trade swirls. Meanwhile, Stellantis has paused retooling at its Ontario plant, delaying production of certain car models due to US tariff threats and electric vehicle policies. 
• Whether tariffs proceed or not, persistent and unstructured threats from the President will create a sufficient cloud of uncertainty and will likely scar Canada's investment outlook, especially in trade dependent industries. In fact, we've trimmed our real non-residential investment forecast for the next two years, averaging growth of under 2.0% annually, weighing on headline GDP in the near-term. 
• Further, almost half of Canadian businesses plan to shift more investments and operations to the U.S. to mitigate potential tariffs and maintain market access, according to a report released last Wednesday by accounting firm KPMG.
• The Bank of Canada is also taking notice. In their most recent Summary of Deliberations, the Bank said, “The threat of tariffs had increased uncertainty, and this would weigh on business confidence and investment intentions". They have begun to see evidence of companies re-evaluating their investment plans. 
• Looking ahead, public sector capital investments may pick up the slack should private investment start to fizzle as a result of tariff uncertainty. Nova Scotia for example was first out of the gates this provincial budget season, highlighting a lofty $2.4 billion capital plan in their 2025 Budget. It wouldn’t be surprising to see other provinces follow suit. 

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