Canadian merger and acquisition activity held relatively steady through the first half of 2026, even as total deal value and average deal size declined, according to a mid-year update from PwC Canada.
The report said 658 deals were announced in the first quarter, with overall activity broadly consistent with recent quarters despite some fluctuations in the second quarter. However, total deal value reached $64 billion in the first quarter, down from a quarterly average of $97 billion last year, while average deal size also eased compared with 2025.
The findings point to a shift in how companies are approaching transactions, as they respond to economic uncertainty and changing sector dynamics while continuing to pursue growth and operational improvements.
“Companies aren’t waiting for conditions to become perfect,” said Sean Rowe, National Leader for Deals Markets and Value Creation at PwC Canada. “They’re looking at where they need more scale, stronger supply chains or new capabilities, and using deals to get there faster.”
Sean Rowe
PwC said the decline in total deal value and average deal size reflects movement in the mix of sectors driving activity, following a period in 2025 that included a smaller number of large transactions in industries such as materials, energy, utilities and financials.
The report also pointed to a more uncertain economic backdrop heading into the second half of the year. It said Canada’s real GDP growth is expected to remain below potential, in a range of 0.9 per cent to 1.3 per cent in 2026, while inflation is projected between 2.5 per cent and 3.0 per cent.
In addition, prolonged uncertainty around North American trade, including the future of the Canada-United States-Mexico Agreement, was identified as a key risk, particularly for sectors reliant on U.S. markets.
“This is exactly why M&A has become so critical right now,” added Sean Rowe. “By building scale at home and strengthening their supply chains, companies are protecting themselves against international headwinds.”
The update highlighted several sectors where dealmaking is being shaped by global and domestic pressures.
In the energy sector, geopolitical tensions, including the Iran conflict, have contributed to supply disruptions that have at times pushed oil prices to multiyear highs. While that environment can create opportunities for Canadian producers, the associated volatility is also increasing inflationary pressures, raising due diligence requirements and potentially driving up borrowing costs for larger transactions.
Agrifood was identified as another area of focus, as companies respond to climate volatility, geopolitical shocks and resource constraints. PwC said these pressures are making food resilience a strategic priority, with increased public funding, private-sector innovation and a growing emphasis on building interconnected ecosystems supporting deal activity.
Tima Miroshnichenko photo
In the insurance sector, the report said foreign insurers are reassessing their Canadian operations, opening the door for domestic firms to expand. This has created opportunities for Canadian carriers to acquire platforms or books of business, as well as to strengthen distribution, underwriting and technology capabilities.
Recent transactions cited in the report include Definity’s acquisition of Travelers Canada and Wawanesa’s acquisition of Everest Insurance Company of Canada, which PwC said illustrate the broader shift underway in the sector.
Overall, the report concludes that mergers and acquisitions are expected to remain a key strategic tool for Canadian companies as they navigate ongoing uncertainty and reposition their operations.
It said organizations are continuing to use deals to accelerate growth, whether by acquiring new capabilities, building scale or divesting non-core assets to fund evolving strategies.
“By building scale at home and strengthening their supply chains, companies are protecting themselves against international headwinds,” said Rowe.
Mario Toneguzzi
Mario Toneguzzi is Managing Editor of Canada’s Entrepreneur. He has more than 40 years of experience as a daily newspaper writer, columnist, and editor. He was named in 2021 and 2024 as one of the top business journalists in the world by PR News. He was also named by RETHINK to its global list of Top Retail Experts 2024, 2025 and 2026.
About Us
Canada’s Entrepreneur is the number one community media platform in Canada for entrepreneurs and business owners. Established in 2016, our podcast team has interviewed over 800 Canadian entrepreneurs from coast-to-coast. With hosts in each province, entrepreneurs have a local and national format to tell their stories, talk about their journey and provide inspiration for anyone starting their entrepreneurial journey and well- established founders.
The commitment to a grass roots approach has built a loyal audience on all our social channels and YouTube – 500,000+ lifetime YouTube views, 250,000 + audio downloads, 50,000 + average monthly social impressions, 15,000 + engaged social followers and 120,000 newsletter subscribers. Canada’s Entrepreneur is proud to provide a local, national and international presence for Canadian entrepreneurs to build their brand and tell their story
