Welcome to our year-end 2025 Private Equity recap and forecast for 2026.
As part of our commitment to providing insightful commentary and analysis for industry players, we’re pleased to present this review of the market and a look at legal trends in the PE space.
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State of the Market
General Deal & Legal Trends – An Update on Private Equity M&A in Canada
The Canadian M&A market – and particularly mid-market private equity M&A – did not “recover” as predicted. For a number of reasons, the momentum in deal flow that was building in Q4 2024 and Q1 2025 did not materialize into sustained strength.
However, PE sponsors were still quite active in Canada in the first three quarters of 2025, as we note in this PE Recap and Forecast. This report looks at results YTD in 2025 and legal trends from across the industry.
Cassels and ACG recently co-hosted an event entitled “An Insider’s Perspective on Shaping Canada’s Economic Future.” With featured speakers including The Honourable Marco Mendicino (also one of our newest colleagues at Cassels) and leaders in PE, a number of thought provoking observations were shared by the panelists.
Budget 2025: Effect on the M&A Market
The Federal budget, which was released in November 2025, outlines several key aspects that will likely impact M&A and PE. Please also see Budget 2025: Building Canada’s Strength for detailed insights.
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In Case You Missed It
Cassels Academy 2025 (Cassels Webinar)
On December 2, 2025, Cassels Academy re-opened its doors, offering a varied and engaging full-day curriculum, including Market Trends: Canadian Private Equity M&A and Public M&A Activity with Jake Bullen and Jason Wang.
Ontario’s Proposed iGaming Model Affirmed: Non-Canadian Gamers Allowed
Ontario’s Court of Appeal has confirmed that iGaming Ontario’s pooled liquidity model—allowing local players to join international gaming pools—complies with the Criminal Code, paving the way for broader participation in the province’s regulated market.
The Ontario Court of Appeal in Terry Longair Professional Corporation v. Akumin Inc. ruled that a corrective disclosure can qualify as a “public correction” under the Securities Act even if it is not followed by a significant drop in share price, affirming a broader, investor-friendly interpretation that focuses on whether the disclosure actually corrects a prior misrepresentation.
Reporting Frequency: Change is Coming for Canada’s Capital Markets
A recent signal from the Toronto Stock Exchange suggests Canada may soon shift venture issuers to semi-annual financial reporting, reflecting global trends and aiming to reduce compliance burdens while balancing investor protection.
In response to escalating trade tensions and US reciprocal tariffs Canada has introduced a new Interim Policy on Reciprocal Procurement, aiming to restrict federal contract access for suppliers from countries that limit Canadian participation in their own procurement markets.
The article discusses recent regulatory developments in Alberta and Ontario that affect electricity interconnection for data centres and clean technology projects. Alberta has imposed a cap on large load connections and denied a self-supply exemption due to land contiguity issues, while Ontario introduced legislation to condition grid access and expanded rules to support virtual power purchase agreements. These changes are particularly relevant to private equity investors evaluating infrastructure, energy, or technology assets, as they introduce new considerations around grid access, regulatory compliance, and long-term project viability.
Access Denied: Federal Court Rejects CRA’s Applications for Shopify’s Information
Highlights how the SCC has recently clarified the CRA’s powers to conduct “Unnamed Persons Requirements” (UPRs) as a permitted form of a “fishing expedition” to test the corporation’s (Shopify’s) compliance with federal tax laws of Canada. While the Court held that these tests are necessary for compliance, they must also balance the need to protect information and consumer privacy.
While this article provides an overview on the structure and impact of Ontario’s Non-Resident Speculation Tax (NRST), it could be particularly important to PE in relation to the identification of the fact that the NRST is more than a tax on land. Partnership or trust unit transactions (unit issuance, redemption, sale, etc.) can trigger NRST where a partnership or trust structure holds land. This is important for firms to consider and plan for.
GST/HST Rules to Help Firms Compete Worldwide: Zero-rating of Cross Border Financial Services
Private equity firms often structure deals across borders. The zero-rating rule explained herein helps Canadian firms remain competitive by removing GST/HST costs on services provided to non-residents. Additionally, many private equity funds use holding companies or investment vehicles that may qualify as “financial institutions” under GST/HST rules. This opens the door to recovering GST/HST on expenses like legal, advisory, and due diligence service.
From Cumulative Effects to One-off Authorizations: BC Shifts its Approach to Project Approvals
This article explores British Columbia’s shift from cumulative effects assessments to one-off authorizations for project approvals. This change has strategic implications for private equity firms, especially those investing in natural resources, infrastructure, or renewable energy projects in Canada. Streamlined approvals mean shorter timelines for project development, which can improve investors’ internal rate of return and reduce holding costs. Less regulatory uncertainty also makes BC a more attractive jurisdiction for PE-backed investments in sectors like mining, energy, and infrastructure.
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What We’re Reading
Big-ticket deals fuel M&A surge in 9M25 – Dealspeak North America
Key Takeaways: Mid-market private M&A and private equity activity in North America during the first nine months of 2025 showed a cautious yet resilient stance. While overall deal volume surged 32% year-over-year to USD 1.78tn, the number of transactions declined, underscoring a more cautious approach among mid-market players. Private equity buyouts rose 51% to USD 376.9bn, driven by large-cap deals, but deal count fell amid valuation pressures and policy uncertainty. Exits also climbed 52%, signaling liquidity opportunities despite subdued mid-market momentum. The sale pipeline remains strong, with numerous mid-sized assets attracting sponsor interest, suggesting continued activity into year-end.
How Private Equity Firms Are Creating Value with AI
“As our clients, and our Cassels lawyers, intensively assess and deploy different AI tools, it’s more important than ever to seek out the appropriate use cases and measure “success” assiduously. For PE firms in particular, the promise of greater efficiency through AI is critical for their value creation playbook. This article provides a refreshingly candid and detailed prescription for PE firms to leverage AI through a “progression of stages” approach” – Jake Bullen
Key Takeaways: Private equity firms are increasingly leveraging artificial intelligence to drive value creation across their portfolios. While generative AI hasn’t yet delivered transformative returns, firms are refining their approach by securing executive buy-in, hiring adaptable talent like full-stack engineers, and conducting AI-focused diligence before acquisitions. By assessing automation potential, data readiness, and competitive positioning early, they align AI initiatives with financial goals from the outset. Structured planning and strategic integration are essential for unlocking AI’s full potential in private equity.
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What We’re Up To
Proud to be Ranked Among the Best Law Firms in the Country by The Legal500 Canada 2026
Cassels is proud to be ranked among the best law firms in the country in the latest edition of The Legal500 Canada.
Cassels Lawyers Recognized by Lexology Index: Canada
We are proud to announce that 45+ Cassels lawyers are recognized as leaders in their field – across 25 areas of practice – by Lexology. Our recognition includes the Co-Chairs of the Cassels Private Equity Group; Jake Bullen and Frank Arnone.
Carla Potter and Alessandro Bozzelli Honoured as 2025 Rising Stars
The Lexpert “Rising Stars: Leading Lawyers Under 40” awards pay tribute to the rising stars and future leaders of the Canadian legal community.
Cassels Lawyers Recognized by IFLR1000 2025
The most recent edition of IFLR1000: Guide to the World’s Leading Financial Law Firms has recognized 40 Cassels lawyers as leaders and rising stars in their fields. Our best showing yet!
Announcing The Cassels National Major Projects Team
Cassels is pleased to announce the launch of our National Major Projects TeamTM (NMPT). Providing strategic advice for every stage in the project lifecycle (from early-stage planning and regulatory approvals, to finance, procurement, construction, operations, and maintenance), the Cassels NMPT represents a national collaboration among leading lawyers in various areas.
The Honourable Marco Mendicino’s Move to Cassels Featured by International News Outlets
The Honourable Marco Mendicino’s move to Cassels has been highlighted by multiple news outlets across Canada and the United States.
Cassels Recognized as One of Canada’s Best Law Firms by The Globe and Mail for 2026
Cassels was once again named as one of Canada’s best law firms by The Globe and Mail, and our Private Equity & Investments team was recognized as a national leader.
Cassels Proud to Sponsor CFA’s Conference “Franchising Meets the Money: Growth & Exit Strategies”
The CFA’s annual Franchising Meets the Money conference, is designed to provide franchise owners and leaders with the knowledge, insights, and connections they need to unlock the full potential of their businesses.
Cassels Recognized Among the Country’s Best in Chambers Canada 2026
We are proud to announce that 70+ Cassels lawyers are recognized as leaders in their field – across more than 25 areas of practice – by Chambers Canada 2026 in the firm’s best showing yet. Our recognition includes the full PE group as well as Jake Bullen, Co-Chair of the firm’s PE team.
Cassels Lawyers Recognized Among the Best in the Country by Best Lawyers 2026
Cassels is proud to announce that 110 of our lawyers – across 35+ practice areas – have been named to the 2026 edition of Best Lawyers in Canada, the strongest showing ever for the firm.
Cassels Lawyers Recognized Among the Best in the Country by Best Lawyers: Ones to Watch 2026
Our future is brighter than ever! Cassels is excited to announce that 43 of our lawyers have been named to the 2026 edition of Best Lawyers: Ones to Watch, our best showing yet.
Cassels Expansion in Calgary Highlighted in Canadian Lawyer Magazine
The recent expansion and renovation in our Calgary office has been highlighted by Canadian Lawyer Magazine in a feature titled “Cassels Doubles Footprint in Calgary with New Office Space.”
Cassels Proud to Serve as Gold Sponsor as ABA Comes to Toronto
Cassels was excited to welcome the annual ABA Business Fall Meeting to Toronto, with Cassels partner Alison Manzer serving as Co-Chair of this year’s event.
Cassels Once Again Achieves Mansfield Certification Plus!
Cassels is proud to announce that we have achieved Mansfield Certification Plus for 2024-2025, recognizing the firm’s commitment to inclusive leadership.
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Recent Rankings
Cassels is proud to be the ranked the #1 Canadian law firm of similar size* for:
- Volume of announced and completed Canadian M&A deals in 9M 2025 (Mergermarket)
- Volume of announced and completed M&A deals outside of the US and Europe in Q3 2025 (PitchBook)
- Volume of announced and completed PE, VC, and M&A deals outside of the US and Europe in Q3 2025 (PitchBook)
- Volume of announced M&A deals with any Canadian involvement in 9M 2025 (LSEG)
- Value of completed M&A deals with any Canadian involvement in 9M 2025 (LSEG)
- Volume of completed M&A deals with any Canadian involvement in 9M 2025 (LSEG)
* Similar sized firms refers to Canadian national firms with fewer than 350 lawyers
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The Cassels Private Equity Outlook is brought to you by the Private Equity Group at Cassels and is edited by Jake Bullen and Liliya Baranova. We’re here to help.