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1. Overview
The infrastructure market continues to be robust in Canada with all three levels of government — federal, provincial/territorial and municipal — engaged in infrastructure development and implementation. Each level of government utilizes various affiliated entities for public service delivery in addition to the direct delivery of such services. Large-scale and high-value capital projects for public infrastructure development are the focus of this review.
The federal government, most of the provinces and many urban municipalities have committed substantial resources to upgrading Canada’s infrastructure through a combination of traditional delivery models, project financed delivery (through public-private partnerships (P3s)) and collaborative contracting models.
Many provincial governments in Canada have established dedicated agencies to execute major capital projects. The most active provincial agencies are Infrastructure Ontario, Infrastructure BC, Alberta Infrastructure and the Société Québécoise des Infrastructures (SQI).
The federal government established the Canada Infrastructure Bank (CIB) in June 2017. Its purpose is to invest C$35-billion of federal funding in revenue-generating infrastructure projects that are in the public interest and attract private capital. The CIB has broad powers, allowing it to pursue potentially innovative funding solutions for public infrastructure projects. Priority sectors of focus for the CIB include green infrastructure, clean power, public transit, trade and transportation and enhanced broadband infrastructure, with a mandate to provide advisory services to project sponsors from the early stages of project development to maximize its potential. To date, the CIB has approved over C$16-billion in investments across Canada for projects such as the new hybrid ferries in British Columbia, the Montreal-Trudeau International Airport transformation, the Réseau express métropolitan, the Darlington Small Modular Reactor and a number of municipal zero-emission bus initiatives.
The P3 procurement methodology has been adopted in Canada for roads, bridges, rail (including rapid transit), hospitals, courthouses, schools, hydroelectric power generation facilities, organics and water/wastewater projects for long-term concessions. Historically, a wide range of accommodation and other public facilities have also been built, based upon design-build (DB), design-build-operation (DBO), design-build-finance (DBF), design-build-finance-maintain (DBFM) and related transaction structures.
More recently, the Canadian market has seen the adoption — in certain sectors — of collaborative contracting models such as alliance contracts, integrated project delivery (IPD) structures and progressive design-build contracts. These collaborative delivery models have been gaining popularity, particularly in transit and healthcare projects in Alberta, British Columbia, Ontario and Quebec.
Several Canadian provinces, as well as the federal government, have enacted prompt payment and mandatory adjudication legislation that apply to public infrastructure projects.
- With effect from October 1, 2019 (subject to certain transitional provisions) Ontario’s Construction Act includes a mandatory prompt payment regime and a mandatory fast-track dispute adjudication process, with the adjudication process being administered and overseen by a new entity called the Ontario Dispute Adjudication for Construction Contracts (ODACC). On November 6, 2024, theBuilding Ontario for You Act (Bill 216) received royal assent and will introduce further amendments to the Construction Act, including amendments to the construction dispute interim adjudication and statutory holdback regime. The new legislation has not yet come into force
- In Alberta, Bill 37: The Builders’ Lien (Prompt Payment) Amendment Act came into force August 29, 2022. Bill 37 renamed the Builders’ Lien Act to the Prompt Payment and Construction Lien Act, allowed for dispute resolution through adjudication and introduced mandatory prompt payment similar to the regime in Ontario’s Construction Act. The Prompt Payment and Construction Lien Act was amended on April 1, 2025, extending the ability to adjudicate a dispute beyond completion of a project by allowing adjudication up until the date of the final payment.
- In Saskatchewan, The Builders’ Lien (Prompt Payment) Amendment Act, 2019 came into force on March 1, 2022, introducing a prompt payment regime and an adjudication process similar to those in Ontario’s Construction Act.
- In New Brunswick, the Legislative Services Branch of the Office of the Attorney General recommended a two-phase reform of the Mechanics’ Lien Act. As part of phase one, the Construction Remedies Act came into force on November 1, 2021, replacing the Mechanics’ Lien Act and modernizing the construction lien legislation. As part of phase two, New Brunswick passed the Construction Prompt Payment and Adjudication Act on June 16, 2023, introducing a prompt payment and adjudication regime. However, the new legislation has yet to come into force.
- Nova Scotia has passed bills introducing prompt payment and adjudication. Bills 119 and 211 have both received Royal Assent but have not yet been proclaimed into force.
- In B.C., the Ministry of the Attorney General began a large table consultation in late 2023 to review legislation adopted in other provinces to determine how to best implement prompt payment legislation. In April 2025, the Attorney General directed Ministry staff to prepare a legislative proposal based on the results of the consultation.
- Manitoba’s Bill 38: The Builders' Liens Amendment Act (Prompt Payment) received Royal Assent on May 30, 2023, As of April 1, 2025, all provisions of the Act are in force.
- In Quebec, An Act mainly to promote Québec-sourced and responsible procurement by public bodies, to reinforce the integrity regime of enterprises and to increase the powers of the Autorité des marchés publics assented to on June 2, 2022, amended the Act respecting contracting by public bodies to add provisions on payment and dispute resolution with respect to construction work. Such provisions came into force on September 8, 2025. Similarly, the Regulation respecting prompt payments and the prompt settlement of disputes with regard to construction work came into force on September 8, 2025, with limited applicability to some categories of contract until September 8, 2027. The changes in the Act respecting contracting by public bodies, which are supplemented by the Regulation respecting prompt payments and the prompt settlement of disputes with regard to construction work, seek to ensure prompt payment of contractors and subcontractors involved in public construction contracts by providing for strict payment deadlines and a rapid dispute resolution mechanism. Such revisions will enhance transparency, efficiency and predictability in the financial management of public construction contracts in Quebec.
Elsewhere in Canada at the provincial level, prompt payment and adjudication legislation are being developed and implemented. For example, Quebec implemented pilot projects to test two main mechanisms to facilitate payments on public contracts and related subcontracts — an obligatory payment schedule and a dispute resolution process using an adjudicator or expert intervenor, in an effort to resolve disputes in a timely manner. These are based on principles similar to those set forth in the Construction Act (Ontario), as adapted to civil law. As a result of the pilot projects, on June 2, 2022, Bill 12 was assented to and came into force, amending the Act respecting contracting by public bodies.
At the federal level, the Federal Prompt Payment for Construction Work Act received royal assent on June 21, 2019, and came into force on December 9, 2023. The Federal Prompt Payment for Construction Work Act will apply to all construction contracts that existed prior to its effective date, December 9, 2023, and establishes prompt payment requirements with respect to federal real property and federal immovables that are similar to the prompt payment requirements set out in the Ontario Construction Act.
In most major public sector infrastructure projects in Canada, whether they are procured through a P3 delivery model or an alternative delivery model, the public sector retains risks related to discriminatory or industry-specific changes in law, costs of insurance, uninsurable events and risk related to pre-existing but undiscoverable environmental conditions. Force majeure event risk is typically shared between private-sector and public-sector parties. The COVID-19 pandemic saw the introduction in various jurisdictions of contractual provisions allocating the risk not only of additional costs and delays related to COVID-19 specifically, but also of future epidemics and pandemics more generally.
The manner in which private participants manage risk varies with the delivery models and how the contract is negotiated with the public sector, how the private sector entity organizes itself and allocates risks among its participants, how the payment model is structured and the availability of insurance. In recent years, the public sector has adopted alternatives to fixed price contract models, including target price models with painshare and gainshare, as part of the diversification of contract models and in response to market forces.
2. Current State of the Public Infrastructure Market
The P3 market in Canada is now mature, as a number of early P3 projects have now been successfully completed and are in operation, many projects have been sold to long-term investors in the secondary market. In addition, as projects mature, many are being sold or refinanced for the first time and gainshare mechanics between public authorities and the private sector related to increased efficiencies in financing solutions and gains on sale are being tested. In addition, public sector procuring authorities are increasingly turning to alternative contract models, such as collaborative contracting and a return to more traditional contract models, in the procurement of major projects.
Funding for public infrastructure remains robust and increasingly diversified.
Starting with the federal government, the Government of Canada’s over C$33-billion Investing in Canada Infrastructure Program is being delivered through bilateral agreements with provinces and territories. It is interesting to note, however, that the funds available through the Investing in Canada Plan are dwarfed by the publicly stated spending requirements of Canada’s major population centres. Accordingly, other sources will be required to fund Canada’s transit infrastructure needs, most notably from the provinces and municipalities. On June 6, 2025, the federal government also introduced Bill C-5: Act to enact the Free Trade and Labour Mobility Act and the Building Canada Act (the One Canadian Economy Act). This new legislation will allow the federal government to prioritize certain projects of national interest by providing a more streamlined regulatory process overseen by the new Federal Major Projects Office.
The Ontario government, for example, has planned investments over the next 10 years, totalling over C$200-billion, with C$33-billion committed in 2025 to 2026. These investments include C$30-billion to support the planning and/or construction of highway expansion and rehabilitation projects, C$61-billion for public transit, including the province’s four legacy priority subway projects (the all‐new Ontario Line, the Scarborough Subway Extension, the Yonge North Subway Extension and the Eglinton Crosstown West Extension), nearly C$56-billion in health infrastructure, nearly C$4-billion beginning in 2019 to 2020 to support the government’s commitment to provide high-speed internet access to every community in Ontario, C$5-billion in the postsecondary education sector and C$30-billion, including C$23-billion in capital grants, to support the renewal and expansion of school infrastructure and child care projects.
Alberta’s Budget 2025 Capital Plan proposes to invest C$26-billion, including C$7.5-billion for municipal infrastructure, C$3.6-billion for health facilities and C$2.5-billion for roads and bridges. The Budget 2025 Capital Plan also includes C$3.8-billion of investment over three years for capital maintenance and renewal of existing buildings, roads, bridges and more.
In British Columbia, Budget 2025 includes capital spending on health, transportation, housing and education totalling C$45.9-billion over the three-year fiscal plan period, with C$15.9-billion in transportation investments and C$15.5-billion in healthcare.
In Quebec, the budget allocated to public infrastructure is $164-billion for the 2025-2035 period.
In addition, there has been a diversification of asset classes to include data centres and other digital infrastructure, power generation and storage facilities, zero emission vehicles and charging networks, high-speed telecommunications lines and others, which provide more opportunities for new domestic and international entrants with depth of specialized experience. With the support of Canada’s federal and provincial governments, new infrastructure investments are also being made in First Nation, Inuit and Metis communities, including the Atlin Hydroelectric Expansion, the Georgina Island Fixed Link, the Kahkewistahaw Landing Infrastructure project, the Wataynikaneyap Power Transmission Project, the Kivalliq Hydro-Fibre Link and the Tshiuetin Rail project.
Furthermore, recent investments in energy transition have seen a heightened focus on clean hydrogen, energy as a service and waste to energy projects. Examples include the Niagara Hydrogen Centre and the Toronto Western Hospital Raw Wastewater Energy Project in Ontario, as well as the Canada Infrastructure Bank’s Building Retrofits Initiative.