Nation-building to spur Canadian M&A in 2026, KPMG says
One-third of Canadian businesses planning a major acquisition, KPMG research shows
TORONTO, Jan. 19, 2026 /CNW/ - Dealmaking in Canada is poised for a pickup in 2026, with one-third of business leaders planning major acquisitions amid a climate of favourable monetary and fiscal policy, economic optimism driven by nation-building and a stronger business outlook, new research from KPMG Canada shows.
In a KPMG Canada survey of 252 business leaders across 14 sectors, 33 per cent of total respondents said they plan to make a major acquisition in the next 18 months to take advantage of potential growth opportunities. Among private or private equity-backed companies, 36 per cent are planning an acquisition.
"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.
Mr. 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
The federal government's nation-building strategy includes spending $115.2 billion over the next five years for infrastructure – including $54 billion for core public assets like transit and AI-enabled digital infrastructure. The government expects these investments will spur over $1 trillion in total investment from the private sector.
Mr. 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," Mr. Tomassetti says.
Domestic deals in vogue
Neil Blair, Partner and National Leader of KPMG Canada's Deal Advisory practice says 2026 will be an opportune year for domestic dealmaking, thanks to momentum towards making Canada more competitive and self-sufficient.
"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," Mr. Blair says.
Smart timing, strong returns
Mr. 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 favorable market conditions can maximize value and sell with confidence."
For more insights on selling a business, read KPMG Canada's latest article, "Exit timing: How to maximize value when exiting your business."
KPMG Canada ranked the No. 1 M&A advisor in 2025
KPMG Corporate Finance in Canada acted as the financial advisor on 65 transactions last year according to data compiled by LSEG (formerly Refinitiv) earning it the top spot in LSEG's 2025 league table rankings (by volume) and ranked No. 1 over a five-year period from 2021-2025 in Canada, advising on more than 280 deals. League table rankings include eligible mergers, acquisitions, repurchases, spin-offs, self-tenders and minority stake purchases.
About the KPMG Private Enterprise Survey
KPMG Canada surveyed 252 decision-makers (CEO or other C-level, vice president or director) at Canadian firms with an annual gross revenue between CAD$50 million to $1 billion or more between November 5-14, 2025. The survey was conducted by Angus Reid Group. Organizations in 14 sectors were surveyed, including: technology and telecommunications, banking and capital markets, insurance, manufacturing, construction, healthcare, consumer and retail, energy and natural resources, public sector and crown corporations, power and utilities, automotive, infrastructure and transportation, agriculture and wholesale trade. The margin of error was +/- 6.3 percentage points, 19 times out of 20.
About KPMG Corporate Finance Inc. Canada
KPMG Corporate Finance Inc. is committed to supporting Canadian businesses with their strategic transactions, with a Canadian team of over 100 bankers and a global network of over 3,000 bankers across offices in 155 countries. The KPMG Corporate Finance practice in Canada offers a broad range of investment banking and advisory services to domestic and international clients--from M&A and divestitures to capital raises, buyouts, financings, debt restructurings, fairness opinions, portfolio solutions and other advisory needs.
About KPMG Canada
KPMG LLP, a limited liability partnership, is a full-service Audit, Tax and Advisory firm owned and operated by Canadians. For over 150 years, our professionals have provided consulting, accounting, auditing, and tax services to Canadians, inspiring confidence, empowering change, and driving innovation. Guided by our core values of Integrity, Excellence, Courage, Together, For Better, KPMG employs more than 10,000 people in over 40 locations across Canada, serving private- and public-sector clients. KPMG is consistently ranked one of Canada's top employers and one of the best places to work in the country.
The firm is established under the laws of Ontario and is a member of KPMG's global organization of independent member firms affiliated with KPMG International, a private English company limited by guarantee. Each KPMG firm is a legally distinct and separate entity and describes itself as such. For more information, see kpmg.com/ca
For media inquiries:
Roula Meditskos
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KPMG Canada
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SOURCE KPMG LLP
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