Nation-building efforts expected to spur Canadian M&A this year: KPMG survey

Marco Tomassetti, president of KPMG Canada Corporate Finance, joins BNN Bloomberg to discuss Canadian M&A in 2026.

TORONTO — Canadian dealmaking activity is expected to pick up this year, driven by nation-building efforts and a stronger business outlook, according to a new survey by KPMG Canada.

Thirty-three per cent of business leaders polled indicated plans to make a major acquisition in the next 18 months to capitalize on potential growth opportunities, the survey released on Monday found.

“The survey is pretty clear on a few things. One is that companies in Canada are looking to do acquisitions. That’s very prominent,” said Marco Tomassetti, president of KPMG Corporate Finance Inc. Canada in an interview.

“The survey’s also clear that there’s a general tone in business in Canada that there needs to be stronger Canadian-to-Canadian trade, and we need to diversify away from our reliance on U.S. growth.”

Tomassetti said in a news release that a number of factors will underpin dealmaking activity this year, including the federal government’s focus on infrastructure, cautious optimism about the trajectory of the Canadian economy, a steady interest rate environment and demographic shifts.

“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,” he said in the release.

In November of last year, the federal government unveiled its investment-focused budget, in which Ottawa laid out plans to spur $1 trillion in investment over five years.

The plan promised generational investments in key projects, including $25 billion for housing, $30 billion for defence and security, $115 billion for major infrastructure and $110 billion to drive productivity and competitiveness over five years.

In August of last year, Prime Minister Mark Carney launched a new major projects office to fast-track nation-building proposals and streamline the federal approval process. Some of the projects identified included ports, railways and energy corridors.

“We have an invest-in-Canada theme that our government is doing with all the major capital projects,” Tomassetti said in the interview.

He added that businesses operating in adjacent industries where some major projects are being proposed could be acquisition targets.

“There’s all these businesses that ripple around those projects, (like) suppliers of components ... You’ll see M&A consolidation as they need to scale up to become of size to service those projects,” he said.

There’s also more clarity on the costs of financing such deals.

Tomassetti said the steady outlook for interest rates will keep capital both accessible and affordable.

Many economists expect the Bank of Canada to keep its key policy rate unchanged at 2.25 per cent for the majority of the year.

Tomassetti said the Canadian mergers and acquisitions environment “felt pretty good” at the beginning of last year and appeared to be normalizing following the COVID-19 pandemic.

However, trade tensions and tariffs led to many deals being halted or terminated.

“It’s hard to do M&A when the front windshield’s really foggy. When I don’t actually know what my future earnings power could be ... how do I price an asset? How do I buy an asset?” he said.

Tomassetti said deal activity in Canada did come back in the second half of 2025, and although there is still a “lot of noise” surrounding trade, it had less of an impact outside of a few sectors.

A change in the trade situation could still pose a risk.

The Canada-United States-Mexico agreement has shielded Canada from the worst impacts of U.S. President Donald Trump’s tariffs, but it is scheduled for a review in July.

The survey results were taken from 252 business leaders across 14 different sectors in November of last year. It was conducted by Angus Reid Group.

This report by The Canadian Press was first published Jan. 19, 2026.

Daniel Johnson, The Canadian Press