If you’ve been following the financial news lately, the tone is hard to ignore. There’s talk of an AI bubble forming, public market valuations stretching beyond logic, and private credit carrying more risk than most people are comfortable with. For anyone who lived through the dot-com era or the 2008 crisis, it brings back memories of markets that turned quickly and painfully.

But while the public markets feel loud and reactive, the private mid-market tells a calmer, more grounded story.

And the real question for business owners and investors is this:

What does all of this mean for Canadian mid-market M&A as we head into 2026?

When you look past the noise, several forces are quietly creating a stable, even encouraging environment for deals in the $10M to $100M range. Below are the trends I see shaping the year ahead.

1. The Public–Private Disconnect Is Creating Stability, Not Fragility

Public market valuations have soared to heights that feel detached from economic reality, while private valuations have held steady, or softened slightly, over the past year. The gap between these two markets is now wider than it has been in decades.

And surprisingly, this disconnect is creating more calm than chaos.

Private M&A activity is no longer tethered to the mood swings of public markets. With less reliance on public multiples as a barometer, private dealmaking is increasingly grounded in fundamentals, relationships, and real performance, not speculation.

In fact, Canadian Lawyer Magazine recently noted that mid-market deals are expected to dominate the M&A landscape into 2025 and 2026, buoyed by private equity firms sitting on historically high levels of undeployed capital.

In 2026, the private market may be one of the few places where steadiness outweighs volatility…a safe harbour in a noisy storm.

2. Economic Pressure Is Quietly Strengthening Deal Flow

Economic headwinds…tariffs, softer consumer demand, and persistent uncertainty, are nudging many owners to consider transitions earlier than planned. At the same time, buyers facing flat organic growth are turning to acquisitions to realign their trajectory.

Layer in the demographic reality: a meaningful wave of baby boomer owners preparing for succession.

What’s becoming increasingly clear is that both sides of the table are motivated. Sellers want certainty and dignity in their transitions, and buyers want stability, clarity, and well-run companies. When both parties move with intention, deal activity naturally rises.

From what we’re seeing across the country, the demand on both sides is real…and growing.

3. Creative Deal Structures Are Now Part of the Playbook

Interest rates are easing, which helps, but the real story is the tightening of acquisition lending from Canada’s major banks. Traditional financing is harder to secure.

Instead of slowing deals, it has pushed the market toward creativity.

Earnouts, vendor take-backs (seller financing), share rollovers… all structures that once felt undesirable now signal adaptability and partnership. Buyers and sellers alike are more open to meeting in the middle, and that willingness is unlocking transactions that would have stalled in previous years.

Creativity is no longer a workaround. It’s a strategy. And it’s working.

4. Policy Shifts Are Re-Energizing Energy and Resource Sectors

The federal relaxation of carbon limits in the 2026 budget has the potential to reawaken M&A activity in several of Canada’s foundational industries. Years of policy uncertainty left many buyers hesitant, but that hesitation is easing.

For the first time in a long time, energy and resource deals are poised for renewed strength, and this will reshape parts of the mid-market landscape in meaningful ways.

5. Private Equity Is Under Pressure to Deploy Capital

According to Bain & Company’s 2025 Global Private Equity Report, global buyout firms are currently sitting on approximately US$1.2 trillion in dry powder. Even more telling, nearly 24% of that capital has been sitting idle for four years or more, thereby increasing pressure to deploy, exit, or risk losing credibility with investors.

Other global estimates suggest total dry powder across private equity remains above US$2.5 trillion when all strategies are included.

All paths point to the same outcome: private equity needs to transact.

That pressure will continue to drive interest in high-quality Canadian businesses throughout 2026, particularly in the mid-market where valuation expectations and operating fundamentals remain attractive.

6. Political Noise Has Faded Into the Background

The shock factor of U.S. political turbulence has worn off. What once felt destabilizing now feels routine. Leaders are less reactive to media cycles and more attuned to what they’re experiencing in their own markets.

This shift back to grounded, experience-based decision-making is quietly enabling more owners to pursue acquisitions and exits without waiting for “perfect clarity” …a standard that never truly arrives.

Looking Ahead: A Year Guided by Clarity, Not Fear

Despite the headlines, 2026 will be a year shaped less by speculation and more by grounded, practical decisions. The private market rewards steadiness, not panic. And for many owners and investors, that steadiness is exactly where the opportunity lies.

Research continues to reinforce this: organizations that centre the human side of transactions are 2.6× more likely to succeed in their transformation efforts (EY & Oxford Saïd). Yet fewer than 41% of acquirers meaningfully include people-related considerations in their deal thesis (Mercer). That gap is where many deals…especially mid-market deals slow down or fail.

In a landscape defined by noise, the real advantage belongs to those who stay centered, the leaders who trust their judgment, honour the human side of every transaction, and move forward with both clarity and intention.

The most meaningful deals are never just financial events. They’re human decisions. And when you approach them that way, you navigate the market with far greater confidence and far less chaos.

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