Canadian Building Investment Soars On Taxpayer-Funded Rental Bubble
Canadian Building Investment Soars On Taxpayer-Funded Rental Bubble
Stephen Punwasi
January 23, 2026
Canadian real estate investment is suddenly booming again—but it’s not what it looks like. Statistics Canada (StatCan) data shows investment in building construction hit a record high in November, driven almost entirely by residential projects. Look closer, and the surge narrows fast—growth is concentrated in Ontario multi-family construction. These aren’t condos, but they’re largely corporate rentals chasing state-backed incentives. What looks like a boom on the surface is a very specific play that presents another headwind for property values.
Canadian builders are suddenly pouring a lot more capital into construction. Seasonally adjusted investment surged 9.7% (+$2.16 billion) to $24.5 billion in November, up 16.6% from last year. The surge took the volume of investment from a 5-month low to a record high in just a month.
The gains aren’t just rising building costs either. Inflation-adjusted building investment saw 9.6% growth in November, and came in 13.0% higher than a year prior. The agency attributes the abrupt climb in part to a lagged response from October’s building permit surge. However, this is still a major surge that suggests October weakness was a temporary lull.
Breaking down the data reveals the vast majority (71.8%) of the investment is in housing. Residential investment surged 13.3% (+$2.1 billion) to $17.6 billion in November. This was largely due to multi-unit building exploding 20.1% higher to $10.2 billion, while single-family construction climbed 5.0% higher to $7.4 billion. The growth was mostly concentrated in Ontario, which drove roughly two-thirds of the monthly growth—$1.4 billion.
Permit data suggests this is largely due to state-backed financing of corporate rental property developments. October’s data revealed that roughly ~75% of Ontario’s permits were for corporate rentals, while condos dropped sharply.
Canada’s Non-Residential Building Investment Remains Weak
Non-residential construction investment is where we learn the housing bubble is back in charge. Non-residential investment climbed a much more modest 1.4% in November to $6.9 billion, less than half the volume of residential. Commercial investment was the only segment to show substantial monthly growth (+2.7%), driven almost entirely by Ontario and Alberta. Meanwhile, institutional growth, like schools and hospitals, rose 0.4%. Industrial investment was even weaker, falling 0.5% in the month.
Ideally, a surge in building investment due to economic conditions would be seen across residential and non-residential activity. The weak growth in non-residential building investment immediately raises a red flag—a lot of cash is being sunk into building homes, but not the services people use or the places they work.
In other words, the record building construction strongly suggests state-backed growth. That’s a really big difference from a building boom from market demand driven by end-user consumption. This is more likely to be feeding at the taxpayer-funded trough, and presents another headwind for home sales. As we previously noted, Canada is attempting to offset its housing bubble with a rental bubble.
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