Canada’s mergers and acquisition market recorded 642 deals valued at $138.8 billion between July 1 and Sept. 30, a sign momentum is building in corporate transactions as the economy heads into 2026, according to PwC’s Canadian M&A Outlook Report.

Half of that activity involved Canadian buyers acquiring Canadian targets, highlighting the role of domestic investment in securing the market during a time of global and economic uncertainty.

The PwC report sheds light on significant government-driven opportunities, as an incentive for future deals. The 2025 federal budget designated more than $81 billion for the defence sector over the next decade and $2.9 billion for sovereign public AI infrastructure investments.

PwC’s Tariff Impact Survey found that 24 per cent of manufacturers, industrial and automotive firms believe their viability could be under two years without strategic action, initiating 34 per cent of respondents to plan M&A to secure long-term stability.

PwC Canada analysts say they expect deal volume to hold steady through the first half of 2026, driven by both domestic consolidation in investments in sectors tied to government initiatives and technological innovation.