Surety providers in Canada are bracing for a new stretch of turbulence post covid as global instability, economic uncertainty, and sector-specific challenges converge. From the rise in large-scale infrastructure builds to growing friction on construction sites, surety leaders say the next 24 months will test the industry’s agility – and its ability to respond to increasingly complex project risks.
According to Chris Kucman (pictured), SVP of surety solutions at Tokio Marine Canada, geopolitical volatility is already beginning to cast a shadow over domestic markets. The interplay of tariffs, changing trade policies, and political shifts is creating a “battle-ready” environment where contractors, brokers, and sureties alike must prepare for disruptions.
“There’s a lot of uncertainty in the world – tariffs, Donald Trump, the wars,” said Kucman. “That really hasn’t even reached or manifested too much domestically yet. And if it does... that’s going to make things even more difficult.”
He noted that while the construction industry remains strong thanks to government stimulus and infrastructure spending, the risks tied to supply chains, labor, inflation and financing are only growing. In his view, the coming months will require a closer relationship between brokers and sureties to manage exposures proactively and prevent last-minute surprises.
As the market grows more volatile, surety providers are seeing a shift in expectations around their involvement. Bonding obligations and bond forms are becoming more detailed, increasing the operational demands placed on surety teams – especially in the early stages of trouble.
“There’s more requirements to do that now than there was in the past,” Kucman said. That includes attending more project meetings, reviewing disputes pre-default, and offering early-stage guidance before insolvency even occurs.
But scrutiny isn’t limited to contract fine print. With more disputes emerging, surety teams are now often pulled into disagreements well before formal claims arise. As Kucman explained, his team is increasingly asked to evaluate early warning signs – like missed deadlines, payment delays, or liens on projects – and provide guidance before problems escalate.
In such cases, sureties are expected not only to interpret bond language, but also to assess the credibility of competing claims, mediate disputes, and support resolutions that can prevent defaults. This has also raised the operational bar for contractors, requiring more real-time engagement, contract sophistication and ability to produce information quickly and accurately, especially when disputes risk tipping contractors into financial distress.
Nowhere are these pressures more visible than in construction. While bond volumes have increased in 2025 thanks to several mega-projects in healthcare and infrastructure, Kucman warned that bond volumes don’t necessarily translate to a healthy construction environment.
He pointed to multiple systemic issues placing stress on the sector: a skilled labor shortage, inflation within a project, high turnover among owners and consultants, and increasing friction through contracts and project execution. These challenges are not only stalling progress but contributing to more frequent disputes and contractor noise.
“The biggest concern is that the amount of disputes and frequencies are going up,” Kucman said.
He added that much of this friction stems from a growing lack of experience across all levels of a project team. “With an aging demographic, there’s a lot of turnover, and [many people] don’t have the actual expertise to allow contracts to keep moving forward without having an issue,” he said. When problems arise, teams often stick rigidly to contractual terms rather than working collaboratively to find solutions, leading to gridlock and, ultimately, more contentious claims environments.
Kucman noted that while this issue isn’t new, it appears to be worsening – amplified by retirements, onboarding challenges, and uneven technical knowledge. The result is a construction environment where even minor issues can derail timelines, budgets, or entire projects.
In this environment, sub-trades and specialty contractors face particularly acute risks, often bearing the brunt of cash flow problems when disputes arise. “There’s more of a financial burden on them,” he said. General contractors may hold the funds, but it’s the subcontractors who often suffer when payments are delayed or withheld.
The impact of all this on sureties is significant. “With noise and disputes, it can affect a contractor's financial performance,” said Kucman, adding that this, in turn, can reduce the level of bonding support they’re able to secure. In addition to assessing financials, sureties are increasingly being asked to investigate claims, examine supporting documents, and determine the extent of their obligations – often in tense, high-stakes environments.
As the industry navigates these mounting pressures, Kucman emphasized the need for better reporting, proactive broker-surety relationships, and more hands-on involvement from all parties to avoid surprises.
