Canadian M&A activity remained relatively steady in the first half of 2026, with 658 deals announced in Q1 and overall volume broadly consistent with previous quarters despite some fluctuations in Q2, according to the PwC Canada 2026 Mid-Year M&A Update released June 23.
Total deal value reached $64 billion in Q1 2026, down from last year’s quarterly average of $97 billion. Average deal size also eased compared with 2025’s average of $148 million, which had been lifted by a smaller number of sizeable transactions in the materials, energy, utilities and financials sectors.
Dealmakers Focus on Scale and Supply Chains
“Companies aren’t waiting for conditions to become perfect,” said Sean Rowe, National Leader for Deals Markets and Value Creation at PwC Canada. “They’re looking at where they need more scale, stronger supply chains or new capabilities, and using deals to get there faster.”
The report highlights a more uncertain backdrop heading into the second half of the year. Canada’s real GDP growth is expected to remain below potential at 0.9% to 1.3% in 2026, with inflation projected at 2.5% to 3.0%. Prolonged uncertainty around North American free trade, including the future of CUSMA, is cited as a key risk for Canadian sectors that rely on US sales.
“This is exactly why M&A has become so critical right now,” added Rowe. “By building scale at home and strengthening their supply chains, companies are protecting themselves against international headwinds.”
Key Sectors Driving Activity
The report identifies three sectors where M&A activity is particularly notable:
Energy: The Iran conflict has created supply shock tailwinds for Canadian producers, pushing oil prices episodically to multiyear highs. However, the same volatility is adding inflationary pressure, raising diligence requirements and potentially increasing borrowing costs for larger deals.
Agrifood: Climate volatility, geopolitical shocks and resource constraints are making food resilience a strategic priority. The report points to increased public funding, greater private-sector innovation and a stronger appetite to build ecosystems as drivers of M&A activity.
Insurance: Foreign insurers are reassessing their Canadian operations, creating a window for domestic carriers to acquire platforms or books of business, build scale and strengthen distribution, underwriting and technology capabilities. Recent deals include Definity’s acquisition of Travelers Canada and Wawanesa’s acquisition of Everest Insurance Company of Canada.
