Canada's 'nation-building' strategy will bring surge in M&A activity this year: KPMG report
Mergers and acquisitions are poised to pick up this year, according to a new report by KPMG Canada , which said that one-third of Canadian businesses are planning a major acquisition.
The report attributes the economic optimism primarily to the federal government’s “nation-building” strategy, as well as a climate of favourable monetary and fiscal policy.
“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,” said KPMG Canada’s president, Marco Tomassetti.
The government plans to spend $115.2 billion on infrastructure projects over the next five years. That includes $54-billion for such core public assets as transit and AI-enabled digital infrastructure.
The government expects the expenditure to spur more than $1 trillion in investments from the private sector.
This wave of public and private financing 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, Tomassetti said.
The survey said 33 per cent of total respondents plan to make a major acquisition in the next 18 months to take advantage of potential growth opportunities.
The poll was conducted in Nov. 2025 by Angus Reid Group and included 252 CEOs or other C-level executives at Canadian firms across 15 sectors. The firms had an annual gross revenue between $50 million to $1 billion or more.
Among private or private equity–backed companies, 36 per cent are planning an acquisition, the survey said.
Tomassetti added that 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.
He said a steady outlook for interest rates from the Bank of Canada will keep capital affordable and accessible, which is positive for financing deals.
He added that c ompanies operating in industries such as construction and engineering, building materials and logistics, oil and gas services, advanced manufacturing, robotics and business services will see consolidation this year as firms in those sectors seek to expand.
“This Canada-first investment agenda combined with both favourable macroeconomic conditions for deals will create a dynamic environment for M&A,” Tomassetti said.
KPMG Canada partner Neil Blair said 2026 will be an opportune year for dealmaking due to momentum in making Canada more competitive and self-sufficient.
He said investments that create a growth environment, wherein bigger companies are needed to take on complex projects, will make smaller, specialized firms highly attractive acquisition targets, while also pushing larger players to scale up to meet the demands of major projects.
“Canada’s economic agenda is creating a pipeline of opportunity for domestic dealmakers that demands scale and sophistication,” said Blair.
He said 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.
• Email: dpaglinawan@postmedia.com