Canada’s mergers and acquisitions landscape demonstrates resilience heading into 2026, reflecting both a return of mega deals and a growing sophistication among clients. After a slower start in 2025, deal activity accelerated in the latter half of the year, setting the stage for an active 2026.
Sarah Gingrich, partner and co-leader of capital markets and mergers and acquisitions at Fasken Martineau DuMoulin LLP, says, “We are starting to see the mega deals happening, particularly in the energy space and in mining.”
That momentum carries into 2026, she adds, pointing to lower interest rates and controlled inflation as catalysts for deal-making.
Sean Stevens, who shares leadership of the capital markets and M&A group, agrees, noting that resolving long-standing valuation gaps helps unlock transactions. “Interest rates come down, inflation stays under control, and people become more comfortable with uncertainty around tariffs and other situations, which allows deals to get done,” he says.
Both lawyers emphasize the market’s evolving comfort with volatility. Gingrich observes, “People get used to geopolitical uncertainty, tariff fluctuations, and market volatility. There’s pent-up demand to do deals, pressure on boards and CEOs, and private equity has a lot of dry powder, creating a more friendly environment for M&A.”
Stevens notes that market participants increasingly internalize regulatory and policy developments. “Even decisions that would have caused major disruption in the past, like the recent US Supreme Court ruling against President Donald Trump’s so-called Liberation Day tariffs, have a more muted impact this time. Investors and strategic players adapt to a new normal,” he says.
Sectoral trends remain clear. Energy, mining, and infrastructure continue to dominate in M&A, supported by government priorities and policy signals in these areas. Gingrich explains that the energy sector, including traditional and renewable assets, is undergoing multi-year consolidation.
“Renewables are a key element of government policy, and alignment with expected returns creates interesting opportunities,” she says. Meanwhile, mining activity benefits from high commodity prices, while technology and AI-related acquisitions are increasingly strategic, reflecting corporate efforts to build internal capabilities externally. Infrastructure also remains a key area of interest, driven by public spending commitments.
Lawyers’ roles have evolved beyond transactional documentation toward strategic advisory. Gingrich says, “Clients are more informed than ever, often using AI for modelling and preliminary due diligence. That lets us focus on helping them execute strategy, justify decisions to shareholders, and structure deals effectively.”
Stevens emphasizes strategy in practice: “The deals where we add the most value are those where we participate in strategy discussions, facilitate negotiations, and provide practical advice that balances legal and business considerations.”
Deal structuring is also evolving. Earn-outs, contingent considerations, and representation and warranty insurance are increasingly standard tools. Stevens says, “These mechanisms help bridge valuation gaps and provide certainty in a volatile market,” reflecting how buyers and sellers approach risk in complex environments.
Canadian M&A has also seen a higher aggregate deal value alongside fewer completed transactions in 2025 than in other years. Jonathan See, partner and co-head of the firm’s national M&A and private equity groups at McCarthy Tétrault LLP, says data shows “a marked increase by value from last year and from previous years,” with M&A activity involving Canadian targets totalling nearly US$170 billion in 2025.
He adds: “The figures reflect the continued strength of the Canadian M&A market.” Yet, he notes, “by contrast, fewer transactions were announced,” representing the lowest annual deal count in three years in Canada.
The explanation lies largely in sectoral concentration and the dominance of strategic buyers, he says, pointing to large-scale consolidation across mining and energy – including transactions such as Anglo American’s bid for Teck Resources, the combination of Cenovus Energy and MEG Energy, and other significant resource-sector deals. “These deals are materially larger – mining company buying mining company; energy company buying energy company,” he says, contrasting those transactions with traditional sponsor-led take-privates.
See situates the past year within a broader post-pandemic cycle. In 2020, many businesses were in asset management mode, reviewing their investments and operations and conserving capital amid uncertainty. By 2021 and 2022, greater liquidity, low interest rates, and government stimulus fuelled activity, particularly among financial sponsors.
More recently, however, private equity has operated in a more selective environment. “On the mid-market side, it’s been a little more challenging,” he says, with some sponsors prioritizing exits and fundraising cycles. Larger global financial players remain active, particularly in larger-scale transactions, he notes, even as Canadian volumes remain below those seen in the US and Europe.
Commodity cycles and geopolitics continue to shape decisions. See notes that elevated gold prices and demand for critical minerals have supported mining transactions, while oil and gas consolidation reflects valuation considerations and strategic objectives.
Kristopher Hanc, co-head of the corporate department at Bennett Jones LLP and co-head of the firm’s capital markets practice, says 2025 was a record-setting year for Canadian M&A by value. Total announced and completed deal value reached approximately $390 billion, surpassing the previous high-water mark set in 2021.
“The story for last year is that the value of Canadian M&A transactions surged in 2025,” Hanc says. “It was driven primarily by large-cap deals in infrastructure and resources.” While overall deal count declined modestly – from 3,408 announced transactions in 2024 to 3,184 in 2025 – aggregate value rose sharply, underscoring the dominance of mega-deals.
Inbound investment was a significant contributor. Hanc points to 16 inbound transactions valued at US$1 billion or more in 2025, compared with 12 the previous year. “About half of that is resources and infrastructure,” he says, highlighting sustained global demand for Canadian hard assets amid relatively stable interest rates and strong commodity pricing.
Looking ahead, Hanc describes the 2026 outlook as “positive, but nuanced,” reflecting what he calls “measured confidence in M&A in Canada.” He expects large transactions to remain a defining feature, particularly in energy and mining. “The two largest deals by value as of late February are in energy. The third and fourth are in mining,” he notes. “We’re seeing that trend continue.”
Tariffs and geopolitical volatility shaped much of the Canadian M&A market in 2025, says Faran Umar-Khitab, co-leader of Gowling WLG’s corporate commercial, funds, and private M&A practice in Canada. However, he sees renewed confidence building for 2026.
“In our view, 2025 was a lot softer than most people anticipated – and the answer to that is tariffs, tariffs, tariffs,” Umar-Khitab says. “From March onwards, deals already in the pipeline got done, but anything earlier was often put on hold, especially in directly affected sectors.”
Activity slowed markedly between April and September before rebounding toward year-end. “By the back end of the year, as the market gained some certainty, we saw transactions pick up again – particularly in businesses delivering real value.” Resilience proved critical. “We saw bigger deals get done. Even smaller deals that closed were businesses able to withstand turmoil and uncertainty.”
He reports increased engagement from financial advisors. “We’re getting calls every day from investment banks – including Silicon Valley banks in Toronto – looking for opportunities,” he says, adding that “there’s a lot of optimism that this year will be better than last.”
Certain sectors dominate discussions: critical minerals, supply chain resiliency, energy security and transition, and AI. At the same time, foreign investment review has become central to deal strategies. “We’re seeing FDI (foreign direct investment) approvals come up much earlier in transactions,” he says, noting heightened scrutiny around cross-border ownership and data exposure.
Reflecting on the market’s recovery in 2025 and the carryover into 2026, Jennifer Grossklaus, partner with Davies Ward Phillips & Vineberg LLP, says, “We expected 2025 to be busy, but tariff uncertainty and market volatility slowed activity early on. Businesses paused sale processes while awaiting clarity.”
However, by the third and fourth quarter, activity accelerated meaningfully, she says. Deal numbers ended roughly flat compared with prior years, though aggregate value rose due to several US mega deals skewing totals.
Heading into 2026, Grossklaus is optimistic. “We come off a really strong second half of 2025, and momentum continues. Buyers and sellers are focused on long-term fundamentals, rather than reacting to daily volatility,” she says.
Mining, technology, and AI are expected to lead. Rising commodity prices, including gold and copper, and efforts to secure critical minerals support consolidation. Sustained investment in AI and digital infrastructure also drives tech deals, while federal infrastructure, energy, and defence commitments bolster industrial and manufacturing activity.
Valuation remains challenging in volatile markets. Grossklaus says earn-outs remain essential, particularly where future performance is uncertain. Contingent value rights, which recently saw increased use in US public deals, may migrate north. “The real value of experienced M&A counsel comes in being solution-oriented, helping solve problems rather than just identifying them. We facilitate transactions and achieve clients’ objectives, even amid uncertainty.”
Canada’s M&A market enters 2026 with momentum, yet complexity remains. And lawyers who practise
in this area will continue to play a critical role, guiding transactions beyond traditional documentation, reflecting the growing importance of sophisticated risk management, strategic deal structuring, and careful attention to policy developments.
Source: Bennett Jones / S&P Market Intelligence