A significant wave of mergers and acquisitions is set to sweep across the Canadian corporate landscape this year, fueled by federal spending plans and renewed economic confidence, according to a new industry report.
Nation-Building Strategy Fuels Deal Optimism
The report from KPMG Canada, released in January 2026, attributes the anticipated surge in M&A activity primarily to the federal government's ambitious "nation-building" strategy. This agenda, combined with a climate of favourable monetary and fiscal policy, is creating a ripe environment for corporate deals.
Marco Tomassetti, President of KPMG Canada, stated that the government's infrastructure-focused plans will act as a key catalyst, particularly for private mid-market deals. "The government’s nation-building agenda will be a catalyst for M&A activity in 2026," Tomassetti said, noting that deal appetite rebounded in the latter half of 2025 after the initial shock of the U.S. trade war subsided.
Billions in Public Spending to Spur Trillions in Private Investment
The federal government has committed to spending $115.2 billion on infrastructure projects over the next five years. This substantial investment includes $54 billion earmarked for core public assets such as transit systems and AI-enabled digital infrastructure.
Officials project that this public expenditure will stimulate more than $1 trillion in investments from the private sector. Tomassetti explained that this confluence of public and private capital is expected to drive consolidation and acquisition activity across several high-growth sectors, including infrastructure, energy, critical minerals, defence, and housing.
Survey Reveals Strong Corporate Appetite for Deals
The optimism is reflected directly in the boardrooms of Canadian companies. The KPMG survey, conducted by the Angus Reid Group in November 2025, polled 252 CEOs and other C-level executives from firms with annual revenues between $50 million and over $1 billion.
The key finding: 33% of all respondents plan to pursue a major acquisition within the next 18 months to capitalize on emerging growth opportunities. The appetite is even stronger among private and private equity-backed companies, where 36% are planning an acquisition.
Tomassetti highlighted additional factors underpinning the positive 2026 outlook, including cautious economic optimism, a steady interest rate environment from the Bank of Canada, and ongoing demographic shifts. He noted that affordable and accessible capital will be positive for financing these transactions.
Neil Blair, a partner at KPMG Canada, emphasized that 2026 presents an opportune year for dealmaking, driven by momentum to enhance Canada's competitiveness and self-sufficiency. The report suggests industries like construction and engineering, building materials, logistics, oil and gas services, advanced manufacturing, robotics, and business services are particularly poised for consolidation as firms seek to expand their scale and capabilities.
"This Canada-first investment agenda combined with both favourable macroeconomic conditions for deals will create a dynamic environment for M&A," Tomassetti concluded, signaling a potentially transformative year for Canadian business.
