2025 Federal Budget
Explore how the 2025 Canadian Federal Budget will impact you and your business.
Significant infrastructure initiatives reshaping capital planning for Canadian organizations
With a focus on sustainable growth, resilience, and digital transformation, budget 2025 includes expanded renewable energy projects, modernization of transportation networks, accelerated digital infrastructure deployment, and enhanced support for community facilities.
Of note is the Build Communities Strong Fund, which commits $51 billion over 10 years starting in 2026-27 (including previously committed funding) to support local infrastructure. With this fund, housing-enabling infrastructure, such as building retrofits, health facilities, and improvements to post-secondary campuses, will be prioritized to address the build-out of local Canadian communities.
Designed to enhance access to international markets, the trade diversification corridors fund commits $5 billion over seven years to finance infrastructure projects that strengthen supply chains and support the efficient movement of goods across Canada and abroad. Projects of all sizes will be eligible, with particular focus on developing and modernizing ports, airports, and rail networks nationwide.
Another part of the government’s broader nation-building mission is the Major Projects Office (MPO), which will fast-track transformative energy, trade, and transportation projects across the country. The focus here is on large-scale, national-interest projects with high-impact infrastructure rather than routine community assets. These include the Sisson Mine for critical minerals in New Brunswick, the Crawford Nickel project in Ontario, the Ksi Lisims liquefied natural gas project in British Columbia, and the Iqaluit Nukkiksautiit hydro project.
Of special interest to the infrastructure sector is Bill C-5, the One Canadian Economy Act, which streamlines the approval of national interest infrastructure projects. As a result, MPO project approvals will be cut from five years to two years, with the MPO aligning approvals across multiple federal regulators to support speeding up projects.
In order to be successful, infrastructure proponents must be prepared for accelerated timelines, face tougher regulatory scrutiny, and more pressure to coordinate across federal, provincial, Indigenous, and private-sector stakeholders.
Now more than ever, Canadian organizations need a dynamic approach to infrastructure capital planning—one that integrates sustainability, technology readiness, and community impact. Strategic capital allocation will hinge on aligning projects with key federal priorities and a readiness to meet new standards.
- Red Chris Mine Expansion, Northwest, British Columbia
- Ksi Lisims LNG, Pearse Island, British Columbia
- North Coast Transmission Line (NCTL) (Phase 3), Northwest British Columbia
- LNG Canada Phase 2, Kitimat, British Columbia
- North Coast Transmission Line (NCTL) (Phase 2), Northwest British Columbia
- North Coast Transmission Line (NCTL) (Phase 1), Northwest British Columbia
- McIlvenna Bay Foran Copper Mine Project, East-Central, Saskatchewan
- Canada Nickel’s Crawford Project, Timmins, Ontario
- Darlington New Nuclear Project, Bowmanville, Ontario
- Nouveau Monde Graphite’s Matawinie Mine, Saint Michel des Saints, Québec
- Contrecoeur Terminal Container Project, Contrecoeur, Quebec
- Northcliff Resources’ Sisson Mine, Sisson Brook, New Brunswick
- Iqaluit Nukkiksautiit Hydro Project, Iqaluit, Nunavut
Map sourced from the Government of Canada website.
What Canadian infrastructure organizations need to know to effectively navigate the new funding allocations and priorities
Meaningful Indigenous partnership is a requirement
The 2025 federal budget commitment of $19 billion is a first step to close the Indigenous infrastructure gap, which is estimated by the Assembly of First Nations to be $349.2 billion.
Ongoing, meaningful Indigenous partnership and consultation is a requirement for infrastructure project success. The Major Projects Office is supported by the Indigenous Advisory Council, ensuring that partnership and Indigenous economic participation are central to all major projects advanced in Canada.
Collaboration between smaller municipalities will increase purchasing power
Smaller municipalities across Canada struggle to access and deploy funding as a result of limited staff and construction capacity. There may also be a lack of procurement sophistication, as well as difficulty attracting skilled contractors.
As a result, municipalities may need to collaborate in order to increase their purchasing power and secure access to federal funding as part of the Build Communities Strong fund.
Climate, clean energy, and a sustainability focus is a must
Boosting clean electricity, strengthening methane regulation, supporting industrial carbon-pricing, and following sustainable investment guidelines are just some of the ways the budget proposes to strengthen Canada’s climate competitiveness.
As a result, and in order to move forward, infrastructure projects will need to align with net-zero and clean objectives. This may include transit electrification, green buildings, water and wastewater upgrades, and more.
Digital infrastructure support is growing
The budget proposes $925.6 million over five years to support large-scale public AI infrastructure, to boost AI compute availability and support public and private research.
Digital infrastructure is taking its place within the larger infrastructure umbrella, and infrastructure proponents must be prepared for this shift.
Supply chain and workforce constraints may stand in the way
While the budget allocates funding for local and Canada-wide projects, Canada does not currently have enough skilled labour or construction capacity to successfully execute the project pipeline. Many construction firms and trades are regionally concentrated, with provinces maintaining differing certification standards. This complicates cross-border movement for labour.
However, even with labour mobility reforms, there is still insufficient supply of labour. Infrastructure organizations will need to build workforce supply chain resilience and manage competition across provinces for skilled tradespeople and contractors.
Public-private partnership will increase long-term investment
While the 2025 federal budget has committed record investments in Canadian infrastructure, federal dollars alone won’t be enough. The government is adopting a Capital Budgeting Framework, which puts capital investment front and centre. It distinguishes day-to-day operational spending from capital investment—a distinction that could make projects more investable.
Canada is working to create a more dynamic economic environment to foster the flow of institutional capital back into the domestic market by expanding infrastructure financing tools. The infrastructure sector should expect and plan for a sustained pipeline of projects arising from a renewed interest in public-private partnerships. We also expect to see the rise of infrastructure-focused funds with private capital increasing interest in long-dated, stable and predictable cash flow investments, with embedded inflation protection and low correlation to the public markets.
Moving from risk avoidance to risk management
While the budget and the MPO aim at cutting red tape and speeding up the regulatory processes, every player in this space will need to have a high level of political courage to call out when, where, and how federal, provincial, and municipal requirements are creating inefficiencies and playing towards risk avoidance versus risk management actions.
Traditionally, all levels of government have not been incented to take risks and fast-track approvals, but rather incented to follow the process, no matter how long that takes. Political courage, willpower, and leadership will be required to ensure that all levels of government can move to a speedy risk management approach that balances accountability, transparency, efficiency, and progress.
Practical steps to position your infrastructure projects for success
In addition to heightened requirements around meaningful Indigenous engagement, communication transparency, and sustainability outcomes, your organization must also pay special attention to evolving compliance requirements, supply chain disruptions, and capacity constraints.
These practical steps will position your organization for success:
Assess project eligibility
Review program guidelines to confirm that the proposed projects meet budget funding criteria, with attention to sustainability, inclusivity, and readiness requirements.
Develop robust business cases
Clearly articulate project benefits, financial viability, and alignment with federal priorities, supported by data-driven analysis and stakeholder engagement.
Strengthen partnerships
Foster meaningful collaborations with local governments, Indigenous communities, and private sector partners to enhance project impact and funding competitiveness.
Prepare for compliance
Ensure readiness to meet reporting, procurement, and environmental standards, leveraging advisory support where necessary.
Engage early and proactively
Initiate transparent dialogue with program administrators and funding agencies to clarify expectations and submission timelines.
Support risk management
Ensure your organization is prepared to lead the process from risk avoidance to risk management, where decisions can be made quickly while meeting regulatory expectations (transparency and accountability).
Budget 2025 creates opportunities for infrastructure projects to move quickly. Is your organization shovel ready?
Whether you need support with project eligibility assessments, funding application preparation, resilient sourcing strategies, procurement risk assessments, or more, our multidisciplinary teams bring sector expertise to ensure infrastructure projects are delivered on time, on budget, and in accordance with federal standards.
Our end-to-end advisory services are tailored to the evolving needs of infrastructure leaders. We provide:
Strategic planning
Guidance on aligning infrastructure portfolios with federal and provincial funding priorities.
Partnership frameworks
Insight into consulting and collaborating with Indigenous communities, private-sector partners, and all levels of government.
Compliance support
Expertise in navigating new procurement frameworks, reporting obligations, and regulatory changes.
Sustainability integration
Advice on embedding sustainability criteria into project planning, delivery, and performance measurement.
Digital transformation
Solutions for leveraging technology in asset management, stakeholder engagement, and risk management.
Capacity building
Training and change management to ensure organizational readiness for new standards and practices.
Fund formation tax planning
Expertise in fund structuring designed to address the tax motivations of the fund investors.
With a collaborative and data-driven approach, we are focused on delivering lasting value while supporting clients through every phase of the infrastructure lifecycle.
Contact our leaders to discuss how to align your capital plans and project proposals with current funding priorities, starting with a consultation to assess your project readiness, strategic positioning, as well as partnership and financing pathways.