Equipment manufacturers in Canada are proving resilient despite market challenges, according to a new report from the Association of Equipment Manufacturers (AEM).
The association recently released The Economic Impact of the Canadian Equipment Manufacturing Industry. The report found that critical mineral mining and infrastructure upgrades are driving demand in Canada’s off-highway equipment sector, with industry output increasing by 11 per cent since 2022.
Commissioned by AEM and prepared by S&P Global Market Intelligence, the report quantifies the industry’s contributions to the Canadian economy across employment and income, industry output, GDP contribution and tax revenue.
“What our report does make clear is that Canada’s equipment manufacturing industry remains a major economic force and a resilient one,” said Megan Tanel, AEM’s President and CEO. “This is despite economic headwinds, including trade uncertainty, softer farm equipment demand and weakness in housing related activity.”
Alongside an 11 per cent increase in sales, employment in the heavy equipment sector grew 3.3 per cent compared to 2022. The Canadian off-highway equipment manufacturing industry generated $54 billion in total industry output, supported 147,000 jobs nationwide, about 7 per cent of Canada’s manufacturing work force, and contributed $24 billion to the Canadian GDP, representing almost 1 per cent of the total nominal GDP.
“I guess one of the most important takeaways of this report is the impact of equipment manufacturing and how it extends far beyond the factory floor,” said Yannick Montagano, President of Kubota Canada.
Six figure salaries
The equipment industry also generated $13.7 billion in total labour income with an average wage of $102,000 for those directly employed by the industry, about 30 per cent above the national average.
While employment grew between 2022 and 2025, annual changes in industry employment showed more volatility. The industry’s direct employment grew 5.9 per cent in 2023 before experiencing a contraction in 2024 and 2025.
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Equipment manufacturing directly supported 70,900 jobs in Canada with a total 147,000 people employed directly, indirectly and induced from the sector. This represents 0.5 per cent of Canada’s total employment base.
“Representing 7 per cent of Canada’s manufacturing employment base, the number of jobs supported by the industry would fill the Montreal Bell Centre more than seven times. Despite headwinds, the industry has proven its adaptability and resilience,” Tanel said.
Industry-supported activity also generated $1.1 billion in taxes, a 10.5 per cent increase from 2022.
CUSMA advantage
A major factor in the industry’s resilience has been the Canada-United States-Mexico Agreement (CUSMA). Despite the negative economic impact of tariffs, CUSMA positioned Canada well in comparison to other United States trade partners, with Canadians construction machinery exports only falling 2.2 per cent year over year. Exports from Germany, for example, fell 28.6 per cent and the United Kingdom recorded a 35.3 per cent reduction.
“According to the S&P Global Market Intelligence data, CUSMA has provided Canada with a meaningful protective shield relative to other U.S. trading partners, roughly 85 per cent of Canadian equipment exports are CUSMA compliant,” Tanel said.
“So, the takeaway is twofold. CUSMA is working as a stabilizer for Canada, but stability cannot be taken for granted. I think we’re feeling that everywhere.”
According to AEM, the main risk moving forward remains policy uncertainty, including tariff changes, rules-of-origin enforcement and retaliatory measures that create volatility in costs and lead times.
Provincial impact
The report highlights the evolving regional footprint of the equipment industry across the country, noting a divergence in fortunes among the provinces that account for the largest shares of direct employment.
“The largest footprints are concentrated in a handful of provinces in terms of total and direct jobs supported. Ontario, Quebec and Alberta lead the way with roughly 75 per cent of jobs,” said Charles-Alexandre Vennat, President and CEO of the Quebec-based CMI Mulching.
“What this reinforces is that equipment manufacturing is very deeply embedded in provincial economies, and particularly in provinces where agriculture, construction, resource development and industrial production play an outsized role.”
Ontario continues to represent the largest share of industry operations and jobs, supporting 27,785 direct jobs, nearly 39 per cent of the national total and 59,521 total jobs.
Quebec is the second largest employer of equipment industry jobs in Canada, supporting 13,625 direct jobs, 19 per cent of total industry jobs in Canada and 29,193 total jobs.
Alberta outpaced national growth trends, with the province supporting 11,395 direct jobs (16 per cent of the national total) and 22,024 total jobs.
AEM’s report is based off an S&P Global Market Intelligence analysis titled, Market Size and Economic Contributions of the Canadian Off-Highway Equipment Industry.
To read the report, click here.
