Nation-building to spur Canadian M&A in 2026, poll shows

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.