Monday Market Minute | Mar 24, 2025

Ottawa leans into infrastructure as a fiscal counter-punch to tariffs

What Moved

The federal government signalled a significant acceleration of infrastructure spending as part of its economic response to US tariffs. Pre-budget leaks indicated new allocations for transit, clean energy, and trade corridor projects — with an emphasis on public-private partnerships to stretch federal dollars. The Canada Infrastructure Bank reported a record pipeline of projects seeking private co-investment. Provincial governments in Ontario and Quebec followed with their own infrastructure commitments.

Why It Matters

Infrastructure has historically been the counter-cyclical private asset class of choice, and 2025 was proving the thesis. Long-duration, inflation-linked cash flows offered precisely the stability that trade-disrupted portfolios needed. Canadian infrastructure funds reported strong institutional inflows, with pension allocators increasing target weights. For HNW investors, the opportunity was increasingly accessible through exempt-market infrastructure funds offering quarterly liquidity and 7-9% target returns with inflation protection.

Signal to Watch

The federal budget, expected in April, would confirm whether infrastructure commitments were real appropriations or aspirational line items — and whether P3 structures would receive the regulatory support needed to attract private capital at scale.

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