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Cision Canada
2 days ago
- Business
- Cision Canada
Promising policy action brings hope amidst continued economic challenges: PwC's 2025 M&A mid-year update released Français
Transformative policy actions could boost Canada's role in North American supply chains and stabilize ties with the US. Trend shows decline in inbound and locally sourced deals; overall deals activity comes in at approximately 1000 deals totalling $134B announced since January 2025. Canadian family offices rebound: deal values increased by 16% from 2023 to 2024, signaling renewed momentum. TORONTO, June 18, 2025 /CNW/ - PwC Canada's 2025 mid-year Canadian M&A update highlights a pivotal moment for the Canadian economy. Amidst global uncertainty and a cooling domestic outlook, Canada is pursuing a bold policy agenda aimed at restoring national economic resilience. While these efforts are rooted in domestic priorities, they may also yield a valuable secondary benefit: a more stable and strategically aligned relationship with the United States. "Canada's current policy direction focuses on building a stronger, more self-reliant economy," said Michael Dobner, National Leader of Economics and Policy Practice, PwC Canada. "This approach also helps foster a more constructive and complementary relationship with the US, one based on shared interests rather than dependency." Economic update: Between January and May 2025, Canadian companies announced 996 deals totaling $134 billion. However, the report notes declines in inbound and locally sourced deals in Canada. This reflects a broader climate of caution, as businesses delay investments and expansion plans in response to persistent uncertainty. PwC's baseline projection for Canadian GDP growth in 2025 remains below 1%. Despite these headwinds, Canada's trade position with the United States remains comparatively strong. Canadian exporters are generally benefiting from relatively low tariffs, especially when compared to countries like China, which continue to face significant trade barriers to the United States. This advantage can help some Canadian businesses to maintain or even grow their market share in the US, offering a rare bright spot in an otherwise subdued economic landscape. In this context, "the current negotiations between Canada and the United States, which benefit from Canada's new vision, may further strengthen Canada's relative trade position with the United States," added Dobner. The report outlines a suite of policy priorities shaping Canada's new vision. 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 and changing the immigration system to focus on attracting highly skilled individuals to Canada. These initiatives are designed to address Canada's productivity and competitiveness challenges, and, if successful, will also position the country to play a more active role in North American supply chains and innovation ecosystems. If early policy actions are interpreted by market players as genuine, practical and decisive, PwC Canada suggests that meaningful improvements in Canada's economic outlook could begin as early as 2026. All levels of government have a crucial role in providing these signals over the coming months. While there is good reason for cautious optimism, the report notes that 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. Canadian businesses must stay vigilant, closely monitor global developments and adopt flexible, risk-aware strategies to navigate an uncertain future. Opportunities for Canadian family offices: The report also highlights the evolving role of Canadian family offices, which are emerging as increasingly influential players in the investment landscape. After a period of decline beginning in 2021, family office deal activity is rebounding. In Canada, deal values rose by more than 16% from 2023 to 2024. Key trends shaping this evolution: Club deals, where family offices co-invest with peers to access larger opportunities and share risk, are gaining traction globally. While only 23% of Canadian family office investments in 2024 were structured this way, compared to 71% globally in 2022, this gap signals untapped potential. Impact investing is on the rise. In 2024, Canadian family offices surpassed the 50% threshold for allocating capital to investments that generate measurable social or environmental impact alongside financial returns. These investments are increasingly aligned with national priorities such as productivity, innovation, and affordable housing. Direct investments, where family offices invest directly in businesses such as private equity, startups or M&A, have grown to represent 70% of global activity, up from a real estate-heavy focus a decade ago. In contrast, 69% of Canadian family office investments in 2024 remained in real estate, indicating potential opportunities to diversify investment portfolios. For more insights and to access the full report, visit About PwC Canada: At PwC Canada, we help clients build trust and reinvent so they can turn complexity into competitive advantage. We're a tech-forward, people-empowered network with more than 7,000 partners and staff in offices across the country. Across audit and assurance, tax and legal, deals and consulting, we help build, accelerate and sustain momentum. PwC refers to the Canadian member firm, and may sometimes refer to the PwC network. Each member firm is a separate legal entity. Please see for further details. Find out more by visiting us at: © 2025 PricewaterhouseCoopers LLP, an Ontario limited liability partnership. All rights reserved.
Hamilton Spectator
04-05-2025
- Business
- Hamilton Spectator
The headwinds and potential ahead for Carney's economic ambitions
Canada now knows who will lead the country as it confronts this nation-defining economic moment, but uncertainty is still the word of the year. 'We are going to build baby, build,' said Prime Minister Mark Carney in his late-night victory speech after the Liberal party won, four seats short of a majority. 'We will need to do things thought impossible, faster than expected.' While Carney struck an optimistic and confident tone, economists say steering a minority government will likely mean more distractions, more spending, and more uncertainty as he takes on the ambitious task of tackling not only the immediate challenge of U.S. tariffs, but also long-simmering issues like productivity, trade diversification, and a Canadian economy that often aims too small. 'The fact that we have a minority government is not the best result, given the somewhat of an emergency economic situation that Canada is facing,' said Michael Dobner, PwC Canada's national leader of economics and policy practice. Carney, along with the Conservatives, was right in emphasizing the importance of making regulations work better and building the infrastructure to help business grow, Dobner said. But efforts to streamline rules and accelerate project approvals could clash with those the government will presumably have to rely on to help push its agenda, he added. 'I'm concerned that with the NDP having the balance of power, it will be very attuned to those voices that for sure will come, and that will slow down that process that needs to move very quickly if we want to be able to become, I would say, more self-sufficient.' Along with building infrastructure, Carney has also emphasized the need to diversify trade. But Dobner said the crucial part to succeed in that will be to create the intellectual property and manufacturing heft needed for Canada to sell its own products. 'Canada has currently more free trade agreements than any of the G7,' said Dobner. 'The issue is not having free trade agreements. The issue is whether we have something to sell to the world.' Convincing businesses to invest in research, machinery and everything required to boost productivity and product offerings will also face the challenge of the Canadian and global economic slowdown being brought about by U.S. President Donald Trump's tariffs. Economic data out this past week showed the U.S. economy shrank 0.3 per cent in the first quarter, while Canada's pulled back by 0.2 per cent in February. While there's a lot that went into those retreats, including higher imports and weather challenges, the numbers confirm a slowing of momentum, said Dawn Desjardins, chief economist at Deloitte Canada. 'The key thing here is just the sense that everyone is extremely nervous,' she said. 'Consumers are not going to be spending on big ticket items ... Businesses are saying, 'Hey, the lay of this land is very uncertain for me. I don't know how my sales projections are going to be, I'm probably not going to be putting money to work in the immediate term.'' The hesitancy could lead Canada's GDP to shrink 1.1 per cent in the second quarter and 0.9 per cent in the third quarter, while unemployment could hit 7.5 per cent, according to an outlook from Deloitte released last week. An economic slowdown in the U.S. will also mean lower demand for exports, while the housing market in Canada was already slumping, leaving few places to look for optimism, said Desjardins. 'It's really tough sledding in the immediate term.' Carney's big stimulus spending plans, totalling $129 billion in new commitments over four years, is aiming to counter those pressures. Canada has some fiscal room to increase spending, but the country's gross debt is creeping up so it's important the money is targeted and well thought-out, said Desjardins. 'It has to be investments for the future,' she said. The Liberal plan is heavily focused on building, including in defence, housing and trade infrastructure such as ports and highways that could help spur more private investment. Overall, the government is hoping to leverage $150 billion in public funds to mobilize $500 billion in investment over five years. 'The plan on paper should provide a boost to longer-term growth,' said Rebekah Young, head of resilience economics at Scotiabank, in a note. But like others, she cautioned about the challenges in seeing the plans come to fruition because of a range of challenges, most notably that minority government. 'It would be brash to pencil in full economic effects of the platform,' said Young. 'Even deft alliance-building would still warrant caution. Policies are yet to be enacted, infrastructure-related projects are notoriously slow within Canada's complex multi-jurisdictional framework, and energy-related ones even more uncertain in a highly polarized environment.' She said Carney has his work cut out for him as he takes on the weakening economy, headwinds from abroad, the limits of federal power and the need to motivative business to 'go big' on Canada amid uncharted uncertainty. 'There is a reasonable risk of a rapid and disorderly deterioration.' This report by The Canadian Press was first published May 4, 2025.
Winnipeg Free Press
04-05-2025
- Business
- Winnipeg Free Press
The headwinds and potential ahead for Carney's economic ambitions
Canada now knows who will lead the country as it confronts this nation-defining economic moment, but uncertainty is still the word of the year. 'We are going to build baby, build,' said Prime Minister Mark Carney in his late-night victory speech after the Liberal party won, four seats short of a majority. 'We will need to do things thought impossible, faster than expected.' While Carney struck an optimistic and confident tone, economists say steering a minority government will likely mean more distractions, more spending, and more uncertainty as he takes on the ambitious task of tackling not only the immediate challenge of U.S. tariffs, but also long-simmering issues like productivity, trade diversification, and a Canadian economy that often aims too small. 'The fact that we have a minority government is not the best result, given the somewhat of an emergency economic situation that Canada is facing,' said Michael Dobner, PwC Canada's national leader of economics and policy practice. Carney, along with the Conservatives, was right in emphasizing the importance of making regulations work better and building the infrastructure to help business grow, Dobner said. But efforts to streamline rules and accelerate project approvals could clash with those the government will presumably have to rely on to help push its agenda, he added. 'I'm concerned that with the NDP having the balance of power, it will be very attuned to those voices that for sure will come, and that will slow down that process that needs to move very quickly if we want to be able to become, I would say, more self-sufficient.' Along with building infrastructure, Carney has also emphasized the need to diversify trade. But Dobner said the crucial part to succeed in that will be to create the intellectual property and manufacturing heft needed for Canada to sell its own products. 'Canada has currently more free trade agreements than any of the G7,' said Dobner. 'The issue is not having free trade agreements. The issue is whether we have something to sell to the world.' Convincing businesses to invest in research, machinery and everything required to boost productivity and product offerings will also face the challenge of the Canadian and global economic slowdown being brought about by U.S. President Donald Trump's tariffs. Economic data out this past week showed the U.S. economy shrank 0.3 per cent in the first quarter, while Canada's pulled back by 0.2 per cent in February. While there's a lot that went into those retreats, including higher imports and weather challenges, the numbers confirm a slowing of momentum, said Dawn Desjardins, chief economist at Deloitte Canada. 'The key thing here is just the sense that everyone is extremely nervous,' she said. 'Consumers are not going to be spending on big ticket items … Businesses are saying, 'Hey, the lay of this land is very uncertain for me. I don't know how my sales projections are going to be, I'm probably not going to be putting money to work in the immediate term.'' The hesitancy could lead Canada's GDP to shrink 1.1 per cent in the second quarter and 0.9 per cent in the third quarter, while unemployment could hit 7.5 per cent, according to an outlook from Deloitte released last week. An economic slowdown in the U.S. will also mean lower demand for exports, while the housing market in Canada was already slumping, leaving few places to look for optimism, said Desjardins. 'It's really tough sledding in the immediate term.' Carney's big stimulus spending plans, totalling $129 billion in new commitments over four years, is aiming to counter those pressures. Canada has some fiscal room to increase spending, but the country's gross debt is creeping up so it's important the money is targeted and well thought-out, said Desjardins. 'It has to be investments for the future,' she said. The Liberal plan is heavily focused on building, including in defence, housing and trade infrastructure such as ports and highways that could help spur more private investment. Overall, the government is hoping to leverage $150 billion in public funds to mobilize $500 billion in investment over five years. 'The plan on paper should provide a boost to longer-term growth,' said Rebekah Young, head of resilience economics at Scotiabank, in a note. But like others, she cautioned about the challenges in seeing the plans come to fruition because of a range of challenges, most notably that minority government. Monday Mornings The latest local business news and a lookahead to the coming week. 'It would be brash to pencil in full economic effects of the platform,' said Young. 'Even deft alliance-building would still warrant caution. Policies are yet to be enacted, infrastructure-related projects are notoriously slow within Canada's complex multi-jurisdictional framework, and energy-related ones even more uncertain in a highly polarized environment.' She said Carney has his work cut out for him as he takes on the weakening economy, headwinds from abroad, the limits of federal power and the need to motivative business to 'go big' on Canada amid uncharted uncertainty. 'There is a reasonable risk of a rapid and disorderly deterioration.' This report by The Canadian Press was first published May 4, 2025.
