Nation-building infrastructure projects will drive Canadian mergers and acquisitions in 2026, says a new report from KPMG Canada.

Dealmaking in Canada is poised for a pickup this year, with one-third of business leaders planning major acquisitions amid favourable monetary and fiscal policy, economic optimism tied to nation-building investments and a stronger business outlook, according to the firm’s research. In a survey of 252 business leaders across 14 sectors, 33% of respondents said they plan to make a major acquisition in the next 18 months to capitalize on growth opportunities, rising to 36% among private or private equity-backed companies.

“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.

Tomassetti said Ottawa’s infrastructure-oriented agenda, cautious optimism about the Canadian economic outlook, a steady interest rate environment and ongoing demographic shifts will also support deal activity in 2026.

“The steady outlook for interest rates will keep capital affordable and accessible, which is positive for financing deals,” he added. “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.”

The federal government’s nation-building strategy includes $115.2 billion in infrastructure spending over the next five years, including $54 billion for core public assets such as transit and AI-enabled digital infrastructure. Ottawa expects these investments to spur more than $1 trillion in total private-sector investment.

Tomassetti said this wave of public and private capital 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 high-growth sectors. He adds that accelerating investment in AI-enabled digital infrastructure including data centres, cloud capacity and supporting power and connectivity assets — will also generate spin-off M&A activity as companies seek to strengthen their positions 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,” said Tomassetti. “This Canada-first investment agenda combined with both favourable macroeconomic conditions for deals will create a dynamic environment for M&A.”

Neil Blair, partner and national Leader of KPMG Canada’s deal-advisory practice, said 2026 will also be a strong year for domestic dealmaking as Canada pushes to become more competitive and self-sufficient.

“Canada’s economic agenda is creating a pipeline of opportunity for domestic dealmakers that demands scale and sophistication,” he said. “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..”

Blair added that buyers and sellers who act decisively will be best-positioned to benefit from a strengthening M&A market.

“For buyers, timing is critical,” he said. “In a competitive market, disciplined dealmakers look beyond short-term fluctuations and focus on fundamentals —strong leadership, clear growth trajectories, and operational resilience. Acting when these strengths align with market opportunity is what separates good deals from great ones.

“For sellers, timing isn’t about guessing the peak — it’s about preparation and momentum. Buyers pay a premium for businesses that are performing well and still have room to grow. Business owners who plan ahead and align their exit with favourable market conditions can maximize value and sell with confidence.”

KPMG Corporate Finance in Canada acted as financial advisor on 65 transactions in 2025 and about 280 deals over the 2021–2025 period, based on transaction volume.

The KPMG Canada survey was conducted by Angus Reid Group. The margin of error was plus or minus 6.3 percentage points, 19 times out of 20.

Pictured: LNG Canada terminal dock in Kitimat, B.C. with first cargo bound for Asia. The terminal’s second phase is a nation-building infrastructure project slated to receive federal funding.

Photo: LNG Canada