Business investment in Canada barely enough to offset depreciation since 2018 with actual declines in Alberta, Saskatchewan, and Newfoundland and Labrador

VANCOUVER, BC, Aug. 6, 2026 /CNW/ -- Nationally from 2018 to 2025, Canada recorded weak business investment (0.99 per cent average annual growth) that was barely enough to offset the wear and tear on existing capital with three provinces, all energy-producing actually experiencing a net decline in the value of their business investment, according to a new study published by the Fraser Institute, an independent, non-partisan Canadian public policy think-tank.

"Business investment in non-residential assets such as plants and factories, machinery and equipment, and computer technology is crucial for improving worker productivity and ultimately living standards, so it's important to understand the performance of Canada as whole and the provincial economies with regard to such investment," said Steven Globerman, author of Capital Investment by Province: An Update.

The study measures growth in both residential and non-residential investment at the provincial level over the 2018 to 2025 period after accounting for the effects of depreciation, finding that three provinces, which are all energy-producing, namely Alberta (-1.05 per cent), Saskatchewan (-0.44 per cent) and Newfoundland and Labrador (-0.67 per cent) experienced net declines, as measured by the annual average change in the value of non-residential business investment. In other words, the level of business investment during this period was insufficient to offset the normal wear and tear (i.e. depreciation) of existing plants and factories, machinery and equipment, and IP such as computers.

A key measure for both current and future worker productivity is the level of business investment relative to employment growth. A straightforward way to improve worker productivity is to increase business investment in things that make them more productive such as newer plants and factories, machinery and equipment, and new technologies.

The country has a whole recorded weak business investment in non-residential assets over this period, with an average growth rate of 0.99 per cent. Critically, the recorded period worsened once employment was accounted for.

The study found that nationally business investment in non-residential capital from 2018 to 2025 was insufficient compared to the growth in employment, meaning that business investment (excluding residential housing) per worker declined nationally.

Results were even worse for provincial performance: eight of the 10 provinces recorded insufficient business investment (excluding residential construction) to offset growth in employment, which means business investment per worker fell. Some provinces like Alberta (-2.8 per cent), Saskatchewan (-1.9 per cent) and Newfoundland and Labrador (-1.5 per cent) recorded stark average annual declines in business investment after accounting for both depreciation and changes in total employment.

"The national decline and pronounced declines in several provinces in the value of business investment per worker indicates potential stark productivity problems continuing and potentially worsening in the future," Globerman said.

"Given the importance of business investment to improvements in the Canadian living standard, policymakers must prioritize policy reforms to make the country more attractive to private business investment."

Follow the Fraser Institute on Twitter  |  Like us on Facebook

The Fraser Institute is an independent Canadian public policy research and educational organization with offices in Vancouver, Calgary, Toronto, Montreal, and Halifax and ties to a global network of think-tanks in 87 countries. Its mission is to improve the quality of life for Canadians, their families and future generations by studying, measuring and broadly communicating the effects of government policies, entrepreneurship and choice on their well-being. To protect the Institute's independence, it does not accept grants from governments or contracts for research. Visit www.fraserinstitute.org

SOURCE The Fraser Institute

MEDIA CONTACT: Steven Globerman, Senior Fellow, Fraser Institute; To arrange media interviews or for more information, please contact: Drue MacPherson, Fraser Institute, [phone] Ext. 721, [email protected]