2025 mid-year Canadian M&A update
Canada at a crossroads: Economic transformation amid uncertainty
In recent months, global economic uncertainty has weighed heavily on national economies, and Canada’s is no exception. A combination of international political shifts and long-standing domestic challenges has led to a slowdown in Canada’s economic activity. Our PwC Canada Economics and Policy practice’s current baseline projection for the remainder of 2025 calls for Canadian gross domestic product (GDP) growth to remain well below 1%.
The current climate of uncertainty has led many purchasers of Canadian businesses to adopt a cautious stance, delaying investments and expansion plans. In the period from January 1 to May 31, 2025, there were 996 deals announced in Canada with a total value of $134 billion. In that same period, we saw declines in inbound and locally sourced deals in Canada, while acquisitions of companies outside of Canada by Canadian companies increased.1
*Anticipated Q2 figures are estimated based on the April to May run rate. Actual results may differ.
Despite broader economic challenges, Canada’s trade position with the United States is currently significantly better than those of many other countries. Benefiting from relatively low tariffs, some Canadian exporters are now better positioned than competitors from other countries, particularly China. This shift presents a unique opportunity for some Canadian businesses to expand their market share in the United States.
In this edition of our Canadian M&A update, we provide an analysis of the Canadian economic environment as well as a special spotlight on opportunities we’re seeing in the Canadian family office space.
Looking ahead: Canadian economic overview
Recent political developments in the United States have influenced public discourse and political priorities in Canada. Issues that were once considered politically sensitive—such as pipeline development, defence spending and regulatory reform—are now being discussed more openly as potential solutions to Canada’s economic challenges.
There’s growing momentum among policymakers to pursue bold economic transformation. Key priorities now include streamlining regulations, initiating large-scale infrastructure projects, increasing investment in defence and Arctic development, removing interprovincial trade barriers, fast-tracking the integration of artificial intelligence (AI) and changing the immigration system to focus on attracting highly skilled individuals to Canada.
A path to renewal
While a full-scale economic transformation will take years, early and decisive actions by the Canadian federal and provincial governments would instill trust and help restore business confidence, laying the foundation for recovery. To positively affect investment sentiment in Canada, such initial steps should be made over the next few months. They should include the release of a transparent roadmap for substantially reducing the permitting time for large projects—and a solid commitment to implement it within a set timeline.
Instead of helping Canada decouple from the United States, in our view, these steps would likely foster greater co-operation between the two countries by aligning their shared economic interests.
If this were to be the case, we could see meaningful improvements in Canada’s economic outlook potentially beginning as early as 2026. We could also see increased transaction activity in the same time frame, particularly among companies positioned to participate, or pivot towards supply chains, in sectors such as infrastructure development and financing, defence, agri-food, AI applications, nuclear energy and natural resources.
Spotlight on opportunities for Canadian family offices
As we saw in our recent Family Office Deals Study, family offices have emerged as significant players across various asset classes globally.
The decline in family office investments that began in 2021 appears to be stabilizing. We’re now seeing signs of a recovery in these investments globally, with the value of family office deals transactions increasing by 14.8% from 2023 to 2024. In Canada, family office investments are also rebounding. Canadian family office deal values increased by more than 16% from 2023 to 2024.
Many Canadian family offices are relatively young compared to their global peers. However, because in many cases they’re following a similar trajectory, we can start to identify some opportunities.
Since 2015, many family offices globally have broadened their investment focus from real estate and funds to include direct investments, such as startups, private equity and M&A. While the Canadian real estate market has created significant wealth for many Canadian family offices, as they mature, there will be opportunities to diversify into new asset classes.
Next phase of evolution for Canadian family offices
Club deals
One important opportunity for Canadian family offices to consider is around club deals, where they co-invest alongside other family offices. Club deals allow family offices to access larger deals than if they were investing alone, as well as manage and share risk, diversify, build their networks, and deepen connections with other families.
Since 2016, club deals have become increasingly prevalent among family office transactions globally, peaking at 71% in 2022. However, in 2024, only 23% of investments by Canadian family offices were attributable to club deals. This difference in relative volumes indicates there’s an opportunity for family offices in Canada to explore new ways of creating value.
Impact investing
Another natural next step for many Canadian family offices is impact investing. Impact investments are “investments made with the intention to generate positive, measurable social and/or environmental impact alongside a financial return.”2 Over the past decade, family offices globally have increased their focus on impact investments, which accounted for over 50% of their total investments for the first time in 2022. Canadian family offices are following this trend and surpassed the 50% mark for the first time in 2024.
The impact investment market provides capital to address increasingly critical social challenges. Because family offices are in many cases less burdened by the increasing regulation and short-term oversight typical of public markets, they can contribute in a meaningful way while generating economic returns. Here in Canada, family offices could play a significant role in helping solve our national productivity challenge. Key investments could include tech, startups and productivity enhancements, as well as affordable housing solutions.
When assessing impact investments, it’s critical for family offices to align their interests and values with their investments. Succession-driven transactions often put a premium on alignment of values, outlook and community impact, so investments such as these could be critical to help family offices access value, both in the short and longer term.
Bottom line
Despite our cautious optimism, the global environment remains unpredictable. Potential global crises, financial crisis as a result of a loss of trust in the US dollar or disruption of entire sectors by emerging technology could have significant consequences.
In this context, Canadian businesses must stay vigilant, closely monitor global developments and adopt flexible, risk-aware strategies to navigate an uncertain future.
1 Source: Capital IQ data, PwC Canada analysis.
2 Source: “What you need to know about impact investing,” Global Impact Investing Network, January 24, 2025, https://thegiin.org/publication/post/about-impact-investing/#what-is-impact-investing.
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National Leader of Economics & Policy Practice, PwC Canada
Tel: +1 416 520 5859
National Director connect program leader Vice Chair and Managing Partner, Quebec and Eastern Canada Region, PwC Canada
Tel: +1 514 205 5000
