Canadian mergers and acquisitions activity is expected to strengthen in 2026, with about one-third of business leaders planning major acquisitions over the next 18 months, according to new research from KPMG Canada.
The outlook, based on a survey of 252 business leaders, points to growing confidence tied to government policy, economic conditions and access to capital, suggesting a more active environment for corporate transactions after a period of volatility.
Acquisition plans signal renewed confidence
KPMG said 33 per cent of respondents plan to make a major acquisition to pursue growth opportunities, rising to 36 per cent among private or private equity-backed companies. The findings are drawn from a survey conducted in November 2025 across 14 sectors of the Canadian economy.
Marco Tomassetti
“The government’s nation-building agenda will be a catalyst for M&A activity in 2026, especially in the private mid-market, where deal appetite returned in the latter half of 2025 after the shock of the U.S. trade war wore off,” says Marco Tomassetti, President of KPMG Corporate Finance Inc. Canada, the No. 1 M&A advisor in 2025, according to LSEG.
KPMG linked the anticipated pickup in activity to a combination of policy direction and macroeconomic factors that it said are supportive of dealmaking.
Tomassetti says the government’s infrastructure-oriented agenda, cautious optimism about the Canadian economic outlook, a steady interest rate environment and persistent demographic shifts will also underpin deal activity in 2026.
“The steady outlook for interest rates will keep capital affordable and accessible, which is positive for financing deals. Higher confidence among investors – underpinned by stabilized and, in many sectors, improving margins – and an acceleration of the great wealth transfer will mobilize more strategic and financial buyers such as private equity this year,” he adds.
M&A hotspots in 2026
KPMG pointed to the federal government’s nation-building strategy as a central driver of future deal activity. That strategy includes planned spending of $115.2 billion over five years on infrastructure, including $54 billion for core public assets such as transit and AI-enabled digital infrastructure. The federal government expects those investments to generate more than $1 trillion in private-sector investment.
Tomassetti says this wave of public and private investment will continue to drive M&A activity in 2026 across infrastructure, energy, critical minerals, defence and housing, as investors pursue scale, capabilities and capacity in sectors with strong growth prospects. He adds that, beyond major projects, accelerating investment in AI-enabled digital infrastructure – including data centres, cloud capacity, and supporting power and connectivity assets – will also drive spin-off M&A activity as companies seek to position themselves more competitively across the AI value chain.
“Companies operating in construction and engineering, building materials and logistics, oil and gas services, advanced manufacturing and robotics and business services will see consolidation this year as firms in these sectors seek capabilities and capacity expansion to service demand. This Canada-first investment agenda combined with both favorable macroeconomic conditions for deals will create a dynamic environment for M&A,” Tomassetti says.
Domestic deals in vogue
KPMG also expects domestic transactions to play a larger role in 2026, supported by policy efforts aimed at strengthening Canada’s economic competitiveness and self-sufficiency.
Neil Blair
Neil Blair, Partner and National Leader of KPMG Canada’s Deal Advisory practice, says those dynamics are creating a pipeline of opportunities that favour domestic buyers and sellers.
“Canada’s economic agenda is creating a pipeline of opportunity for domestic dealmakers that demands scale and sophistication. Investments in infrastructure, energy, critical minerals and business services will create a growth environment where bigger companies will be needed to take on complex projects. This dynamic will make smaller, specialized firms highly attractive acquisition targets, while pushing larger players to scale up to meet the demands of major projects. This is in addition to continued succession-led M&A and significant dry powder sitting with private equity funds and family offices across North America,” Blair says.
Smart timing, strong returns
Blair says the anticipated improvement in market conditions will reward buyers and sellers who are able to act decisively and prepare effectively.
Blair says buyers and sellers who can identify the right opportunities at the right time and act with confidence will benefit most from a stronger M&A market.
“For buyers, timing is critical. In a competitive market, disciplined dealmakers look beyond short-term fluctuations and focus on fundamentals–strong leadership, clear growth trajectories, and operational resilience. Acting when these strengths align with market opportunity is what separates good deals from great ones,” he says.
“For sellers, timing isn’t about guessing the peak–it’s about preparation and momentum. Buyers pay a premium for businesses that are performing well and still have room to grow. Business owners who plan ahead and align their exit with favourable market conditions can maximize value and sell with confidence.”
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.
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