Despite uncertainty, in currency and commodity markets, Canada ranks right up there with the U.S., China, U.K., and Germany in terms of attractiveness for capital investment.
In fact, more than half of Canadian survey respondents in an EY study see the state of the local economy improving.
Canadian, U.S. and global respondents are bullish on the Canadian and global economy and that is fuelling an appetite for M&A. Last year at this time, only 10 per cent of Canadian survey respondents saw the Canadian economy improving. Today that number is 54 per cent. An impressive improvement in such a short period of time. Not surprisingly, Canada also continues to garner attention from our fellow NAFTA member countries looking to invest heavily, with Canada, ranking as the #1 and #2 foreign destination for U.S. and Mexico respondents.
The reality is, uncertainty isn’t going away any time soon, so organizations here in Canada are looking to embrace it. The recent political changes in Europe and the new U.S. Administration are not hampering M&A, and may actually create more opportunities. This can work both ways Canadian players are looking to international acquisition opportunities as a way to secure and develop their global ambitions. Sixty-two per cent of Canadian companies are actively pursuing deals – compared to just 48 per cent, six months ago.
According to Doug Jenkinson, partner, Transaction Advisory Services, at EY Canada, Canadians list innovation as an important trend to impact M&A markets in the next 12 months. Given the constant state of change and disruption, the ability to “future proof” their business model is the key strategic initiative for 40 per cent of our Canadian respondents. With innovation a driving force, by buying smaller businesses to address critical need, they can grow their size and fill innovation gaps.
The Canadian economy is strong which is helping to drive M&A market overall. By harnessing innovations we have a real opportunity to continue to show the world we are open to investment.