The results of KPMG Canada’s private enterprise survey have revealed that 33 percent of all companies polled – and 36 percent of private or private equity-backed companies – are planning major acquisitions within the next 18 months to pursue possible growth opportunities.
“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 Marco Tomassetti, president of KPMG Corporate Finance Inc. Canada, in a press release.
KPMG expected the following factors to impact deal activity in Canada in 2026:
- favourable monetary and fiscal policy
- cautious optimism about the country’s economic outlook, spurred by its nation-building strategy
- the federal government’s agenda centred on infrastructure
- a steady interest rate environment
- persistent demographic shifts
“The steady outlook for interest rates will keep capital affordable and accessible, which is positive for financing deals,” Tomassetti said. “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.”
Promising dealmaking areas
KPMG noted that the Canadian government’s nation-building initiatives include investing $115.2 billion in infrastructure over the next five years, including $54 billion for key public assets such as transit and artificial intelligence (AI)-enabled digital infrastructure.
The federal government expects these investments to drive more than $1 trillion in total investment from the private sector.
“This Canada-first investment agenda combined with both favorable macroeconomic conditions for deals will create a dynamic environment for M&A,” Tomassetti said.
According to him, deal activity this year will increase due to public and private investments across infrastructure, energy, critical minerals, defence, and housing, as well as investments in AI-enabled data centres, cloud capacity, and supporting power and connectivity assets.
“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,” Tomassetti said.
He noted that investors have been seeking scale, capabilities, and capacity in sectors with growth potential.
Domestic deals
Neil Blair, partner and national leader of KPMG Canada’s deal advisory practice, described 2026 as a good year for domestic dealmaking.
“Canada’s economic agenda is creating a pipeline of opportunity for domestic dealmakers that demands scale and sophistication,” he said in KPMG’s press release.
Blair explained that investments in the areas of infrastructure, energy, critical minerals, and business services will enable an environment that spurs larger companies to embark 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,” he said. “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 noted that the stronger M&A market will pose the most benefits to buyers and sellers with confidence and clever timing. Regarding buyers, he stressed how timing is essential.
“In a competitive market, disciplined dealmakers look beyond short-term fluctuations and focus on fundamentals—strong leadership, clear growth trajectories, and operational resilience,” he said. “Acting when these strengths align with market opportunity is what separates good deals from great ones.”
Regarding sellers, Blair emphasized the importance of preparation and momentum.
“Buyers pay a premium for businesses that are performing well and still have room to grow,” he said. “Business owners who plan ahead and align their exit with favorable market conditions can maximize value and sell with confidence.”
More on survey
KPMG’s survey covered 252 business leaders at Canadian companies spanning the following sectors:
- 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
- wholesale trade