Canada is experiencing an infrastructure spending boom not seen in decades. The Canadian government has announced plans to spend $159 billion on infrastructure investments over the coming five years.
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Big infrastructure spending is a major tailwind for many Canadian stocks
This does not include plans for Canada to reach NATO defence spending targets of 5% of gross domestic product (GDP) in the coming five years, either. Already, Canada has pledged $62 billion for defence-focused projects in 2026.
This also doesn’t factor in the rise in private infrastructure investments in Canada. With the government focused on approving projects of national importance, projects are being approved faster.
All this means that several Canadian stocks could be primed to enjoy outsized tailwinds over the coming five to 10 years. Here are two quality stocks that should continue to benefit from these tailwinds.
MDA Space: Profiting from the space boom
The first stock set to win is MDA Space (TSX: MDA). The international space race is back. Both companies and countries are keen to invest in their space and geospatial capacities.
MDA is one of the best ways to play this trend in Canada. It is a global leader in satellites, specialized space technologies, and earth observation. Currently, 63% of its revenues come from Canada. MDA has been winning an oversized share of Canadian defence projects simply given that it is a Canadian company.
MDA has a $40 billion opportunity pipeline and a $3.7 billion project backlog. This provides around two years of foreseeable revenue growth for MDA.
MDA recently announced an acquisition in the U.S. It also just announced plans to invest in CLS, a French geo-intelligence firm. Clearly, it is looking to expand its capacities abroad even further.
With a price-to-earnings (P/E) ratio of 33, MDA is by no means cheap. However, unlike many of its peers, it is profitable. Its stock has pulled back due to an equity financing related to the CLS deal. If it were to continue to decline, it could be a nice opportunity to add the stock.
Stantec: A cheap advisory stock with attractive growth
Stantec (TSX: STN) is another stock that should benefit from the infrastructure boom. Stantec provides engineering and advisory services across water, environmental services, infrastructure, buildings, and energy.
The company has a great track record of growing organically and by acquisition. It has a diversified platform across sectors and regions. Over the past 10 years, Stantec has grown revenues by a 10.7% compounded annual growth rate (CAGR) and earnings per share (EPS) by a 11.7% CAGR.
With a $9 billion backlog, it should be in a strong position to hit its 2026 target of 8.5%-11.5% net revenue growth and 15%-18% EPS growth.
Despite great operational and financial results, Stantec’s stock is down 24% in 2026. The market is worried that AI will disintermediate professional service companies like Stantec. While it is a concern to monitor, Stantec believes AI is actually a tailwind.
Firstly, the build-out of AI infrastructure is creating project opportunities for Stantec. Secondly, Stantec is harnessing AI applications to help improve workflows and increase staff productivity. Lastly, Stantec’s professionals are widely certified with experience and expertise that AI cannot easily replicate.
Today, Stantec trades with a P/E ratio of 15. With a free cash flow yield of 6%, this stock looks quite attractive given its growth profile. Given the infrastructure surge, it looks like Stantec will have no shortage of business opportunities for the near future.
