CANADA Law and Practice Contributed by: Kevin West, Andrea Hill, Priya Ratti and Gabriel Potkidis, SkyLaw
SkyLaw Professional Corporation 22 St Clair Ave E Suite 200
Toronto Ontario M4T 2S3 Canada
Tel: +1 416 759 5299 Fax: +1 866 832 0623 Email: kevin.west@skylaw.ca Web: www.skylaw.ca
1. Trends 1.1 M&A Market
1.2 Key Trends Key trends within Canadian M&A include:
While 2025 was off to a shaky start following the intro - duction of broad US tariffs, confidence rebounded meaningfully as the year progressed, with deal‑mak - ing momentum building in the second half of the year and positioning the market well heading into 2026. Although the war in Iran has driven oil prices higher and introduced renewed macro-economic uncertain - ty, Canadian M&A participants have shown resilience in navigating periods of volatility. Canadian M&A is expected to remain robust in 2026. The Canadian economy is undergoing a period of rapid transformation, driven by significant public and private investment in defence, artificial intelligence, mining, and infrastructure. Investor confidence has remained high despite ongoing uncertainty surround - ing tariffs, trade, and a shifting geopolitical landscape. These structural shifts are being reinforced by govern - ment policy. The Canadian government has articu - lated an ambition to double non‑US exports over the next decade, expand global trade relationships, and increase infrastructure spending. Together, these ini - tiatives represent generational change and are likely to act as a powerful catalyst for increased M&A activity.
• Deal participants are increasingly embracing crea - tive structures, including earn‑outs, deferred pay - ments, minority equity rollovers, and representation and warranty insurance, to bridge valuation and risk-allocation gaps. • Investors are deploying capital more selectively, favouring fewer but larger investments. In response to market conditions, some private equity funds have postponed exits. • Succession plans implemented by family-run busi - nesses to transfer wealth are a key driver of M&A activity. • Shareholder activism has remained resilient, with activists continuing to focus on shaping corporate strategy, including potential M&A activity. • Cybersecurity and data safekeeping continues to be a top priority for Canadian companies, with a significant rise in data breaches and ransom attacks. • The Canada-first economic agenda of the federal government will demand complex projects, making boutique, specialised firms attractive acquisition targets. • The Canadian government updated its investment guidelines to consider explicitly transactions that undermine the nation’s economic security.
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