Canada may be sitting on the edge of a multi-year investment boom, but turning that potential into reality will require governments to clear the bottlenecks that keep major projects stuck in planning, according to a new report from TD Economics.
In a note released this week, TD's Chief Economist Beata Caranci and Deputy Chief Economist Derek Burleton highlighted more than 300 publicly announced projects spanning energy, critical minerals, transportation, defense, and artificial intelligence. Together, TD estimates these projects represent over C$1 trillion in potential investment over the next decade, with the possibility of reaching C$1.5 trillion to C$1.7 trillion if early successes attract additional private capital in a self-reinforcing "flywheel" effect.
The catch, the economists stress, is that announcements don't automatically translate into shovels in the ground. Many projects face lengthy permitting processes, regulatory uncertainty, and interprovincial trade barriers that can delay or even kill otherwise viable investments.
What's driving the optimism?
TD's report comes at a time when Canada's economy is navigating a complex landscape. The country is grappling with escalating trade tensions with the United States, including new tariffs on Canadian goods and retaliation from Ottawa. Yet, despite these headwinds, the bank sees structural factors that could support a sustained investment cycle.
Global demand for critical minerals—used in electric vehicle batteries, renewable energy systems, and defense applications—is rising sharply. Canada holds significant reserves of many of these minerals, positioning it as a potential key supplier. Similarly, the push to diversify energy exports and build out digital infrastructure like AI data centers is creating new investment opportunities.
The "flywheel" concept is central to TD's thesis. If a few large projects break ground and succeed, that could signal to other investors that Canada is a reliable place to put capital. That confidence could then attract more private money, creating a virtuous cycle that lifts the entire economy.
The barriers that could stall the boom
But the path from announcement to completion is rarely smooth. TD points to two major chokepoints: permitting and interprovincial trade barriers.
Permitting for major projects in Canada can take years, involving multiple levels of government, environmental assessments, and consultations with Indigenous communities. While these processes are important, they can also create uncertainty that discourages investment. TD argues that streamlining approvals—without sacrificing environmental or social safeguards—would be one of the most effective ways to accelerate the pipeline.
Interprovincial trade barriers are another hurdle. Canada's internal trade is often hampered by regulations that vary from province to province, making it harder for companies to move goods, services, and labor across borders. Reducing these frictions could lower costs and make large-scale projects more viable.
The report also notes that the current trade environment adds urgency. With the U.S. imposing tariffs on Canadian goods, Canada needs to find new sources of growth. A domestic investment boom could help offset some of the drag from weaker exports and a softer loonie.
What it means for investors
For everyday investors, the TD report is a reminder that big-picture economic trends can shape the performance of their portfolios. If Canada does enter a sustained investment cycle, companies in sectors like construction, engineering, critical minerals, and technology could see increased demand for their products and services.
However, the report also underscores the gap between announcements and actual spending. Investors should be cautious about reading too much into headline project numbers. As TD notes, the "flywheel" only spins if projects actually get built.
The report also ties into broader questions about Canada's economic resilience. While some analysts see growth brightening despite tariff drag, others worry that trade disputes could weigh on business confidence. The Bank of Canada, meanwhile, is balancing inflation pressures against the need to support growth.
For now, TD's message is one of cautious optimism. The potential is real, but so are the obstacles. Whether Canada can turn its project pipeline into a genuine investment supercycle will depend on policy choices in the coming years.
As the economists put it, the case is getting stronger—but it's not yet a done deal.
