The Parliamentary Budget Officer estimates that the federal government will spend approximately $159 billion on infrastructure between fiscal years 2025-26 and 2029-30. Importantly, that figure excludes the recently adopted NATO 5% spending target and therefore primarily reflects civilian infrastructure investments rather than defense-related projects.
That need comes at a particularly interesting time. After recently recording two consecutive quarters of negative gross domestic product (GDP) growth, Canada entered what economists commonly refer to as a technical recession.
For policymakers, infrastructure spending is often viewed differently than other forms of government expenditure because it can increase the economy’s productive capacity and support private-sector investment for decades. In contrast, relying solely on monetary policy to stimulate growth can be difficult when inflation remains a concern.
Infrastructure as an investing theme
Large institutional investors have recognized this dynamic for years. At the end of fiscal 2025, CPP Investments maintained a substantial infrastructure portfolio, financed through a combination of both equity and debt investments. For institutions with long time horizons and billions of dollars to deploy, infrastructure has become a major asset class in its own right.
Retail investors, however, do not have access to the same opportunities. Direct infrastructure investments are often illiquid, require significant capital commitments, and demand specialized expertise to evaluate properly. Fortunately, exchange-traded funds (ETFs) have made the asset class far more accessible.
Like our previous guide to REIT investing, this article will examine what qualifies as infrastructure, how infrastructure ETFs are constructed, and some of the most popular Canadian-listed options available today. Along the way, we’ll also cover key considerations such as methodology, fees, diversification, and liquidity so investors can better evaluate whether infrastructure deserves a place in their portfolios.
What counts as infrastructure?
One challenge investors face when researching infrastructure is that it is not actually an official stock market sector. The equity markets in Canada, the U.S., and internationally contain a substantial number of infrastructure-related companies. The problem is that many investors fail to recognize them because infrastructure does not appear as one of the Global Industry Classification Standard (GICS) sectors.
According to MSCI, the 11 sectors are energy, materials, industrials, consumer discretionary, consumer staples, health care, financials, information technology, communication services, utilities, and real estate. From there, companies are further classified into 25 industry groups, 74 industries, and 163 sub-industries. Nowhere in that framework is there an official “infrastructure” sector.
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Regardless of the specific assets involved, infrastructure investments tend to share several characteristics. Many generate revenue through long-term contracts, regulated pricing structures, or essential-service demand. In some cases, contracts include inflation-linked escalators that allow revenue to rise alongside increases in consumer prices. Pipelines often incorporate inflation adjustments into transportation agreements, and utilities periodically apply for rate increases through regulators.
Just as importantly, infrastructure businesses are typically backed by tangible assets. Unlike the technology-heavy S&P 500, where a large portion of book value is tied to intellectual property, software, research and development, or other intangible assets, infrastructure companies derive much of their value from physical assets that can be seen, touched, maintained, and monetized over decades.
Therefore, infrastructure is best thought of as a cross-sector investment theme. It pulls together companies operating essential physical assets with large capital bases, high barriers to entry, and long-lived cash flows. In practice, infrastructure exposure tends to be concentrated across five sectors:
Real estate
Infrastructure-oriented real estate focuses less on apartments and office buildings and more on mission-critical assets that support economic activity.
Examples include data centre REITs, which lease server capacity and computing infrastructure to cloud providers and enterprise customers, telecommunications tower REITs that own wireless infrastructure, and industrial warehouse operators that support logistics and e-commerce supply chains.
Utilities
Utilities are perhaps the most recognizable form of infrastructure investing. This category includes electrical generation facilities, high-voltage transmission networks, local distribution systems that deliver power to homes and businesses, natural gas distribution networks, and wastewater utilities.
It also encompasses renewable energy infrastructure such as wind, solar, and hydroelectric facilities. Many of these assets operate under regulated frameworks that provide relatively predictable cash flows and long-term visibility into revenues.
Communication services
Modern infrastructure increasingly extends beyond transportation and power networks. Communications infrastructure includes fibre-optic networks, broadband providers, wireless towers, 5G deployment networks, and submarine communication cables.
