Capital and Repair Expenditures Survey, 2014 (revised), 2015 (preliminary) and 2016 (intentions)

Released: 2016-05-10

Public and private sector organizations anticipate spending $241.6 billion on non-residential capital construction and machinery and equipment in 2016, down 4.4% from 2015, the second consecutive decrease in annual spending. Spending on both capital construction and machinery and equipment are expected to fall.

Chart 1 
Capital expenditures: Lower intentions for 2016

Total capital spending by private sector organizations is expected to decline 9.3%, from $173.6 billion in 2015 to $157.4 billion in 2016, while organizations in the public sector are anticipated to increase spending by 6.5%. The anticipated drop in private sector expenditures is largely attributable to declines in spending on capital construction.

Continuous decline in spending in the mining, quarrying, and oil and gas extraction sector

Capital expenditures of organizations in the mining, quarrying, and oil and gas extraction sector are forecast to drop $14.3 billion (or -23.1%) to $47.7 billion in 2016, the second consecutive year of decline. The anticipated drop is largely attributable to the oil and gas extraction subsector, which would represent about 77% of the total spending for the sector. Both the conventional oil and gas extraction (-$7.5 billion) and non-conventional oil extraction (-$5.5 billion) industries anticipate declines in capital spending.

Three provinces are forecast to account for over 95% of the drop in spending in the sector in 2016. The largest drop in spending is expected to be in Alberta, where spending is predicted to decline 27.5%, from $38.8 billion in 2015 to $28.1 billion in 2016. Capital spending is expected to decrease $2.3 billion in Saskatchewan, while in British Columbia, expenditures are anticipated to drop $698.7 million.

Organizations in the mining and quarrying (except oil and gas) subsector in Quebec (+$475.1 million), British Columbia (+$394.9 million) and Ontario (+$213.6 million) anticipate increases in capital spending.

Other industrial sectors

Of the remaining 19 sectors, 11 foresee decreases in non-residential construction and machinery and equipment capital expenditures in 2016. The largest decline is anticipated in the manufacturing sector, where spending is expected to drop from $19.1 billion in 2015 to $17.0 billion in 2016. The decrease is forecast for both capital construction and machinery and equipment.

Expenditures in the real estate and rental and leasing sector are expected to decline $580 million (or -5.0%) to $11.0 billion in 2016, largely as a result of expected spending decreases in Ontario and British Columbia.

Spending in the accommodation and food services sector is forecast to drop $420.0 million (or -9.7%) to $3.9 billion. The decline is mainly attributable to anticipated spending decreases in Ontario, Quebec and British Columbia.

Capital spending by the public administration sector is forecast to increase 4.9% to $32.6 billion. This increase is largely due to a $1.1 billion anticipated rise in spending in the federal government public administration subsector.

Total capital spending is expected to increase $2.4 billion (or +8.5%) in the transportation and warehousing sector to $30.7 billion, largely as a result of higher expenditures on transit and ground passenger transportation, air transportation and pipeline transportation.

Provinces and territories

Total capital expenditures are expected to decrease in seven provinces and territories. Alberta (-$8.9 billion) anticipates the largest drop in total spending, attributable to a $10.7 billion decline in spending in the mining, quarrying, and oil and gas extraction sector.

Saskatchewan is a distant second with an anticipated decline in capital spending of $2.9 billion to $13.6 billion, mainly due to an expected drop of $2.3 billion in the mining, quarrying and oil and gas extraction sector.

In Newfoundland and Labrador, capital expenditures on non-residential construction and machinery and equipment are expected to decline 10.0% to $9.4 billion, as a result of the anticipated decrease in spending in the mining, quarrying, and oil and gas extraction, transportation and warehousing, and utilities sectors.

Total capital expenditures are forecast to drop 3.7% in British Columbia to $27.1 billion in 2016, mainly as a result of lower spending in the manufacturing and mining, quarrying, and oil and gas extraction sectors.

Capital spending in Ontario (-0.1%) is expected to be virtually unchanged at $69.5 billion in 2016. Anticipated gains in spending in the transportation and warehousing, utilities, and retail trade sectors are expected to be offset by declines in the manufacturing, public administration, and real estate and rental and leasing sectors.

Spending is anticipated to rise $2.4 billion in Quebec to $36.3 billion in 2016, mainly as a result of increased spending in the public administration, transportation and warehousing and manufacturing sectors, as well as in the mining and quarrying (except oil and gas) subsector. However, the province's spending in the education services and health care and social assistance sectors is expected to decline.

In Nova Scotia, capital spending is expected to increase by about $526 million, mostly because of higher spending in the public administration and utilities sectors.

Capital expenditures on intellectual property products

Capital expenditures related to intellectual property are excluded from expenditures on non-residential construction and on machinery and equipment.

In 2014, capital expenditures on oil and gas and mineral exploration dropped 18.5% to $7.3 billion. The decline was largely attributable to decreased spending in Alberta, Newfoundland and Labrador and British Columbia.

In 2014, exploration drilling for oil and gas, which accounted for over 60% of capital spending for oil and gas and mineral exploration, fell 18.5% to $4.5 billion. Similarly, spending on geological, geophysical, and other exploration and evaluation costs for oil and gas declined 29.6%.

Spending on software fell to $8.0 billion in 2014, down 4.0% from $8.3 billion in 2013. Spending decreases were reported in seven provinces and territories, led by Ontario (-$206 million), followed by Quebec (-$134 million) and Manitoba (-$123 million).

Contact information

For more information, contact us (toll-free 1-800-263-1136; 514-283-8300; STATCAN.infostats-infostats.STATCAN@canada.ca).

For analytical information, or to enquire about the concepts, methods or data quality of this release, contact Debra Roberts (613-951-8360; debra.roberts@canada.ca), Investment, Science and Technology Division.