Canadian megaprojects have outgrown the insurance market's capacity to cover them, according to Aimee Lewis (pictured), vice president and major infrastructure practice leader at Marsh Risk Canada. Where projects once topped out around $1 billion a decade ago, the market now regularly sees $3 billion to $4 billion projects, with some reaching $15 billion. Capacity hasn't kept pace.
"There's simply not enough insurance capacity from a construction standpoint to cover large multibillion projects on a ground-up basis," Lewis said.
It's the piece of the current infrastructure push she's best positioned to speak to directly. Lewis works with clients on projects worth more than $200 million, advising them on how to structure programs that appropriately cover that scale of risk, and singles out capacity as the constraint she deals with most concretely, distinct from the broader pressures, such as AI adoption, trade uncertainty, and labour shortages, shaping the wider infrastructure conversation.
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Closing the capacity gap doesn't follow a single formula, according to Lewis. The approach depends heavily on the client, with some owners comfortable retaining more risk themselves and others preferring to exhaust as much of the traditional market as possible before looking elsewhere. For those pursuing additional capacity beyond the traditional market, options include tapping non-traditional or pure excess capacity, or structuring monoline coverage that insures a single event, an approach Lewis said can work well in natural catastrophe-exposed areas where a project faces one dominant peril rather than broad, layered risk.
Risk retention itself varies by client appetite. Some owners are more comfortable taking on a larger share of the exposure directly, insuring up to a set limit and then holding the excess themselves, for instance, covering a $3 billion project with the top $1 billion retained as self-insurance. Others lean toward captive or alternative risk transfer structures, taking on ground-up risk in exchange for access to higher overall limits, a trade-off that shifts more risk onto the client upfront but can unlock capacity that wouldn't otherwise be available.
"There's not a single approach," Lewis said. "It's definitely dependent on the client's appetite and their comfortability in the space."
That variation reflects how much more frequently these conversations are happening industry-wide, according to Lewis.
"Projects in recent times have increased significantly," Lewis said, "and this is a much more active discussion than what it was, say, 10 years ago in certain sectors."
The push behind these megaprojects goes well beyond insurance capacity. Prime Minister Mark Carney has pitched Canada as a "safe harbour" for global capital, telling more than 100 major investors gathered in Toronto last week that the country is positioned to build within a shifting global economic order. Carney has pledged to attract $1 trillion in investment over the next five years, part of a broader push to reduce Canada's reliance on the US amid ongoing trade tensions.
The investors in the room represented more than $120 trillion in combined assets, and Carney used bilateral meetings with executives including BlackRock's Larry Fink and Blackstone president Jon Gray to make the case directly. More than 160 projects were pitched at the summit, spanning data centres, pipelines, and port expansions, backed by new tax incentives and a commitment to faster project approvals.
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That scale of ambition is exactly what's colliding with the capacity constraints Lewis described. As more multibillion-dollar projects move from pitch to construction, the gap between what owners need insured and what the market can absorb only widens.
That gap is compounded by how the projects themselves are structured. The federal Major Projects Office, tasked with fast-tracking work deemed of national interest, has referred projects spanning energy, mining, and public infrastructure, including an LNG export expansion and electricity transmission upgrades in British Columbia, critical minerals mines in Ontario, Quebec, and New Brunswick, and a hydroelectric project in Nunavut. Sectors that traditionally operate under different playbooks are now landing on the same national list.
That distinction matters on the ground, according to Lewis. Public infrastructure projects have increasingly moved toward collaborative contract models in recent years, she said, while energy, power, and mining projects still tend to rely on more traditional design-build or construction management structures, each carrying its own risk allocation and, by extension, its own insurance profile.
Whatever the sector or contract structure, Lewis said the stakes converge on the same outcome.
"You can ask any person who works in construction; the biggest fear is not finishing a project on time or on budget," Lewis said.
