A farmer bales his hay crop, right, as a pick-wagon collects the bales near Cremona, Alta.Jeff McIntosh/The Canadian Press
Canadian producers of the equipment used to build, mine and farm are growing – but over uneven terrain.
Infrastructure and mining projects are supporting demand for heavy equipment, according to a new industry report, which found the sector’s sales activity rose 11 per cent and employment grew 3.3 per cent since 2022.
But a weak housing market, farm-sector volatility and U.S. trade uncertainty are weighing on the sector’s outlook, which an Association of Equipment Manufacturers report describes as “selectively resilient but uneven.” The AEM is a North American trade group that represents more than a thousand companies.
The triennial review, set to be unveiled Monday by industry leaders from Canada’s equipment manufacturing sector, shows an industry caught between rising demand tied to infrastructure, mining and major projects, and an uncertain outlook over the economy and trade.
The report found that the industry directly generated $29.3-billion in sales activity in 2025, up from $26.4-billion in 2022. Off‑highway equipment makers – producers of farm and construction machinery such as tractors and excavators – directly employed about 71,000 people in 2025, up from 68,700 three years earlier.
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But those gains are one example of unbalanced growth behind the sector, which accounts for 7 per cent of the country’s manufacturing jobs base. Those new jobs were concentrated in 2023, before direct employment fell in each of the next two years. Residential construction weakened in 2024 and remains a source of uncertainty for the sector, limiting demand for construction machinery, the AEM report said. Farm equipment sales are being squeezed by lower crop revenues.
Trade tensions also weighed on investment: business spending on machinery and equipment fell 9.4 per cent in the second quarter from the prior period, according to Statistics Canada.
A major factor in the industry’s resilience has been what the report calls “the protective shield” of the United States-Mexico-Canada Agreement. Canadian construction machinery exports to the U.S. fell only 2.2 per cent year over year, compared with declines of 28.6 per cent for Germany and 35.3 per cent for Britain.
Still, Canadian equipment makers are hopeful that stronger construction and mining demand, supply-chain adjustments and more productive machinery can help offset pressure in weaker parts of the market, said Yannick Montagano, president of Kubota Canada Ltd.
The company is a major supplier of agricultural and construction machinery in Canada, best known for its tractors, compact excavators and utility vehicles.
Ottawa’s push to accelerate major projects, build trade infrastructure and expand the skilled-trades work force could also translate into new demand.
“The real test here is going to be how these policies, how these announcements get implemented,” Mr. Montagano said in an interview before the report’s publication.
Canada needs to strengthen its competitiveness at home through reduced interprovincial barriers, skilled-trades development and better ports, rail lines and border infrastructure, he said.
“For us, it can’t just be that one thing, trade policy alone.”
The AEM report was prepared for the organization by S&P Global Market Intelligence.