As we reflect on 2024, it’s clear that industries we serve have faced a dynamic mix of challenges and opportunities. From evolving market demands to policy shifts, businesses have had to remain adaptable to stay competitive.
Looking ahead to 2025, the recent American Election may bring new changes, especially in regulatory, tax, and trade policies, which could significantly impact certain sectors. Let’s dive into the key trends we’ve observed this year and explore what the road ahead may hold for Transportation, Construction and Oil & Gas industries in Canada.
Transportation
2024 Trends: The Canadian trucking and transport industry faced significant challenges in 2024, with declining freight rates, fewer shipments, rising inflation, and excess capacity in the marketplace threatening profitability. Economic uncertainty remains a major concern, with 65% of transportation companies citing it as a key issue in a recent survey executed by Hub International. Additionally, nearly 60% of businesses noted shifting customer demands as a significant challenge. While fuel costs have stabilized since the spikes of 2021-2022, waning demand for freight and elevated insurance rates and elevated equipment costs have continued to pressure margins.
2025 Outlook: Companies that diversify their operations and strategically optimize fleet asset deployment and utilization—both equipment and drivers—will be better equipped to navigate the industry’s ongoing volatility, including evolving border regulations and a fluctuating economic environment. According to this Canadian Logistic Market report, warehousing and distribution services are projected to be the fastest-growing segment in the industry. While gradual recovery is expected to take hold in the latter half of 2025, a significant capacity contraction will likely be necessary for a full turnaround. These shifts highlight the importance of adaptability and strategic planning to remain competitive in a transforming market.
Construction
2024 Trends: The construction industry faced several challenges in 2024, including worker shortages, rising labor costs, inflation, and severe weather conditions, which contributed to slow overall growth. This was largely due to a significant downturn in residential construction. However, investments in non-residential construction continued to show strength, marking nine consecutive quarters of growth. In a bid to support the sector, the Canadian government announced $6 billion in federal funding over 10 years in April 2024 to establish the Canada Housing Infrastructure Fund (CHIF), aiming to address housing-related infrastructure needs and bolster the industry.
2025 Outlook: While the 2024 decline in home building may temper overall growth, residential construction is projected to rebound between 2025 and 2029, fueled by a recovery in new housing demand and ongoing renovation activity. To navigate uncertainty and maintain profitability, tight risk management and adaptability will be crucial, with strong work safety strategies playing a key role. Addressing the labor shortage remains essential, with effective strategies including enhanced benefits, targeted training programs, and the integration of advanced technology to attract and retain a skilled workforce. Resilience will depend on the industry’s ability to evolve and meet these challenges head-on.
Oil & Gas
2024 Trends: The Canadian oil and gas sector continued to demonstrate resilience and growth in 2024, with capital investment forecasted to reach $40.6 billion. This growth was supported by significant production activity, such as Shell Canada’s record-breaking 75 wells drilled this year—73 of which were in British Columbia—matching the company’s combined drilling activity over the prior six years.
However, the industry also faced increasing regulatory and geopolitical pressures. On November 4, the Government of Canada introduced draft regulations targeting greenhouse gas emissions from oil and gas production. These regulations propose a cap equivalent to 35% below 2019 levels, signaling a clear push towards reducing the sector’s environmental footprint.
At the same time, U.S. President-elect Donald Trump has pledged to impose tariffs on major trading partners, including Canada, which could significantly affect the energy sector. Canadian crude oil exports, valued at over $110 billion in 2023, account for more than a fifth of all oil refined in the U.S., with 70% of those barrels going to Midwest refiners. Any tariffs on Canadian oil could disrupt this critical supply chain, potentially increasing fuel costs in the Midwest. Natural gas trade may also be impacted, as Canada exported an average of 8.4 billion cubic feet per day to the U.S. in 2024, primarily via pipelines.
2025 Outlook: The Canadian Association of Energy Contractors forecasts a positive year for the oil and gas sector in 2025, with 6,604 wells expected to be drilled in Western Canada—marking a 7.3% increase from 2024. Additionally, the number of jobs in the sector is projected to grow by 7% year-over-year, reaching 41,800 positions.This growth is largely attributed to the completion of the Trans Mountain pipeline expansion earlier this year and the first major LNG export terminal starting up, which has significantly increased export capacity for Canadian oil producers. The expanded pipeline is expected to drive higher drilling activity and contribute to the sector’s overall economic impact.
However, uncertainty looms as Trump’s recent threat of sweeping tariffs on all goods has raised concerns within Canada’s energy sector. Tariffs could disrupt trade relationships and add pressure to a sector already navigating regulatory changes and environmental commitments. Despite these challenges, the industry appears poised for a year of moderate growth, driven by increased capacity and strategic investments in infrastructure.
Conclusion
As 2024 comes to a close, these major industries reflect a year of both challenges and growth opportunities. From rising costs and labour shortage in construction to significant investments in oil and gas and ongoing volatility in transportation, these sectors are navigating a complex economic landscape. Stay tuned for our follow-up blog in early 2025, where we’ll provide updated insights, including the potential impact of the U.S. Policy changes and economic shifts on these critical industries.