Canada stands at a critical juncture, with the potential to unlock over $1 trillion in project investments over the next decade, a sum that could translate into significant economic gains for every Canadian. However, the realization of this economic bounty hinges precariously on the ability of the nation to streamline its tax and permitting processes. A recent report by TD Economics paints a stark picture: without substantial reforms, Canada risks leaving an estimated $12,000 per person in real output gains on the table by 2035.
The sheer scale of the opportunity is immense. TD Economics has identified more than 300 publicly announced projects across five key sectors – energy, resources, artificial intelligence (AI), defence, and transportation infrastructure – with a projected value ranging from $1.5 trillion to $1.7 trillion over the next decade. This pipeline represents a substantial opportunity to bolster Canada’s economic standing and improve the quality of life for its citizens.
The Investment Landscape: Sectors and Projections
The breakdown of this massive investment potential reveals key areas of focus. The energy sector leads the charge, accounting for an estimated $363 billion, or 34% of the total projected spending. This is closely followed by defence, with $281 billion earmarked for modernization and expansion. The burgeoning field of artificial intelligence is also a significant contributor, with $158 billion in planned investments. The resources sector is projected to attract $140 billion, while transportation infrastructure rounds out the top five with $114 billion.
Examples of these ambitious undertakings include major initiatives like Wind West, the proposed Peace River nuclear power project, the vital Alberta-British Columbia oil pipeline, and the critical modernization of the North American Aerospace Defence Command (NORAD) facilities. Furthermore, the report highlights 86 mining projects that contribute to the overall investment figures.
TD Economics estimates that over $190 billion of this investment will materialize within the bank’s immediate two-year forecast window. An additional $500 billion is expected to flow in over the subsequent three to ten years, with a substantial $270 billion slated for projects beyond the decade mark. This long-term outlook underscores the transformative potential of these investments.
The Economic Dividend: A $12,000 Per Capita Gain
The core of TD Economics’ argument lies in the potential economic uplift for the average Canadian. Under a high investment scenario, where these projects are successfully realized and Canada achieves a sustained 7% annual growth in real investment – mirroring the pace seen between 2000 and 2010 – the report projects non-residential investment to reach $1,076 billion by 2035. This stands in stark contrast to a baseline scenario where investment only reaches $729 billion, assuming a more modest growth rate.
The tangible benefit for households is projected to be significant. TD Economics estimates that this accelerated investment trajectory could lead to approximately $12,000 in additional real output per Canadian by 2035. This represents a doubling of the gains anticipated in their baseline scenario.
The impact on per capita GDP growth is equally compelling. The high investment scenario forecasts an annual growth rate of 1.8% in real GDP per capita from 2026 to 2035. This is a marked improvement over the baseline scenario’s projected 1.0% growth and significantly surpasses the sluggish 0.5% growth recorded between 2016 and 2025. Such sustained growth is crucial for improving living standards and creating a more prosperous future for all Canadians.
The Permitting Bottleneck: A Stumbling Block to Progress
Despite the immense potential, a significant hurdle stands in the way of Canada realizing these economic benefits: its complex and often lengthy permitting processes. TD Economics identifies permitting timelines as the most significant constraint on investment momentum, particularly in the energy, mining, and infrastructure sectors. While the federal Impact Assessment Act, enacted in 2019, legislated a 180-day decision window, the report points out that the majority of delays occur outside this formal clock, during the initial planning and environmental review stages.
Research from the Canada West Foundation, cited within the TD Economics report, found that the initial planning phase alone can average a staggering 332 days. This protracted process can deter investors, increase project costs, and ultimately slow down the pace of development. For projects that require extensive consultations, environmental impact assessments, and multiple levels of government approval, these timelines can extend into years, creating uncertainty and hindering Canada’s ability to compete on the global stage for investment.
Beyond Permitting: The Challenge of Tax Reform and Innovation
While permitting reform is a critical piece of the puzzle, TD Economics emphasizes that it is not the sole determinant of success. The report implicitly points to the need for broader tax and fiscal policy reforms that can further incentivize investment and foster innovation. The current tax regime and its impact on capital formation and reinvestment are key considerations.
The report also touches upon a worrying trend in Canada’s innovation landscape. Data cited from Leaders’ Fund indicates a significant decline in Canada’s share of high-growth companies. Between 2016 and 2024, Canada’s share of these vital economic engines across Canada, the US, the EU, and Israel fell from 4.7% to a mere 1.5%. Compounding this concern is the observation that the proportion of high-potential companies founded by Canadians that remain in Canada has also plummeted, dropping from 74.9% to 32.4% over the same period. This brain drain and capital flight represent a significant loss of innovative capacity and future economic potential.
Addressing the Labour Demand: A Growing Concern
The successful execution of these large-scale projects will undoubtedly place immense pressure on Canada’s labour market. The report estimates that construction alone will require hundreds of thousands of workers over the next decade. This demand will create fierce competition for skilled tradespeople, engineers, and project managers, who will also be sought after for ongoing housing construction and critical infrastructure renewal projects.
TD Economics warns that these looming labour shortages could become the practical constraint that prevents Canada from converting its ambitious investment intentions into completed projects. Proactive strategies for skills development, training, and immigration will be essential to ensure that Canada has the workforce necessary to capitalize on this economic opportunity.
Regional Economic Impacts
The projected investment boom will not be evenly distributed across the country, with some provinces and territories poised to experience a significantly larger impact. Nova Scotia, for instance, is estimated to see project spending equivalent to 352.6% of its 2024 GDP. The territories follow with 123.4%, and Alberta with 66.5%. Prince Edward Island, at the other end of the spectrum, is projected to have project spending at just 1.2% of its GDP. This regional disparity highlights the need for tailored economic development strategies that can ensure inclusive growth across all parts of Canada.
Government Initiatives and Business Sentiment
Recognizing the importance of attracting and facilitating investment, the federal government has taken steps to address these challenges. The Prime Minister’s Office has reported that since September 2025, 15 projects and six transformative strategies, representing over $126 billion in potential investment, have been referred to the Major Projects Office. Furthermore, the first-ever Canada Investment Summit is scheduled to take place in Toronto from September 14 to 15, 2026, signaling a commitment to fostering dialogue and action on investment attraction.
The Bank of Canada’s second-quarter 2026 Business Outlook Survey offers a mixed but generally positive view of business sentiment. While firms’ investment intentions remain at a high level, overall business sentiment has seen a slight deterioration following three quarters of improvement. This suggests that while businesses are keen to invest, underlying economic conditions and potential headwinds may be influencing their overall outlook.
The Capital Outflow Challenge
Adding another layer of complexity to Canada’s investment landscape is the issue of capital outflow. A report by RBC highlights a concerning trend, estimating a net investment outflow from Canada exceeding $1 trillion over the coming decade. Their analysis indicates that for every dollar invested from abroad, two dollars are exiting the country. This significant outflow of capital can diminish the pool of domestic investment available for crucial projects and limit Canada’s overall economic growth potential. Addressing the factors contributing to this outflow, such as competitive returns, tax policies, and regulatory environments, will be paramount to reversing this trend.
In conclusion, Canada possesses a remarkable opportunity to significantly enhance its economic prosperity over the next decade. The $1 trillion in identified projects represents a powerful engine for growth, capable of delivering substantial benefits to every Canadian. However, the realization of this potential is contingent upon decisive action. Streamlining permitting processes, implementing forward-thinking tax reforms, fostering innovation, and addressing labour market needs are not merely policy recommendations; they are imperative steps that will determine whether Canada seizes this moment and unlocks a more prosperous future for all its citizens. The $12,000 per capita gain is within reach, but it requires a concerted and strategic effort to overcome the existing barriers.
