Canada's Middle Market M&A Update and Industry Reports
Canada's Middle Market M&A Update – Q3 2025
Trade-related uncertainty continued to challenge Canadian markets throughout Q3 2025, leading the Bank of Canada to reduce its overnight rate to 2.50% in response to evolving macroeconomic pressures. M&A activity declined modestly this quarter, influenced largely by ongoing uncertainty surrounding U.S. tariff policy and expectations of further interest rate cuts.
- Interest rate cut amid ongoing uncertainty: The Bank of Canada reduced its overnight rate from 2.75% to 2.50% in September 2025 in response to a softening labour market, reduced inflationary pressures, and continued uncertainty regarding U.S. tariffs.
- Modest decline in M&A activity: M&A activity declined 2.8% quarter-over-quarter, decreasing from 250 transactions in Q2 2025 to 243 in Q3 2025. The Industrials and Financials sectors accounted for 42.4% of deals, with 58 and 45 transactions, respectively.
- Evolving macroeconomic factors: The S&P/TSX Composite Index gained 11.7%, led by the Materials and Consumer Discretionary sectors, while the CAD weakened against the USD. The unemployment rate rose to 7.0% in Q3 2025, the Consumer Price Index increased to 2.4%, and housing starts declined slightly but are expected to rise. Economists expect slow but positive GDP growth for the remainder of 2025.
Quarterly Industry Reports Q3 2025
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Brett Franklin CPA, CA
President, MNP Corporate Finance
Brett Franklin, CPA, CA, is President, MNP Corporate Finance Inc. Based in Winnipeg, Brett develops and implements creative business strategies for clients in all industry sectors and in all stages of the business life cycle.
Brett’s primary role is facilitating the sale of companies, but he also provides support with business acquisitions, corporate restructuring and transactional due diligence.
With a diverse background in financial services, including banking, private equity, hedge funds and structured investment products, Brett has the knowledge and ability to resolve challenging financial issues and develop practical solutions to even the most difficult problems. He is adept at guiding clients at any level of the organization, helping them understand complex situations and providing professional business strategy advice.
Prior to joining MNP, Brett was Director of Hedge Fund Administration at UBS AG in the Cayman Islands. He holds the Chartered Professional Accountant (CPA) designation, qualifying as a Chartered Accountant (CA) in 2001, and a Master of Accountancy degree from the University of Manitoba. In his free time, Brett coaches minor hockey and baseball.