Canada's deal market is on hold

Things are usually colder up north, but Canada's deal market is absolutely frigid.

By the numbers: Canadian M&A volume is down 46% from this point in 2021, an all-time record with around US$350 billion of activity, despite expectations of another strong year.

• For context, U.S. M&A is off 27% and global activity is off 20%, per Refinitiv.
• Also worth noting that this is a strategic merger issue in Canada, as the country's private equity activity is actually up 3% year-over-year.

State of play: Some of the decline can be chalked up to chance and the macro morass. But many buyers and sellers likely are waiting on the sidelines as Canadian politicians and regulators debate new antitrust laws that may be much closer to international norms than to Canada's more monopolistic standards.

• New rules were formally proposed in April, and could be finalized by as early as this summer.
• In the meantime, as something of an opening salvo, Rogers Communications was sued by Canadian competition regulators over its proposed C$20 billion takeover of Shaw Communications — a merger that would have created the second largest mobile and cable operator in Canada, a country in which consumers pay the world's highest cellular service bills.
• Rogers pledged to fight regulators, but later adopted a slightly more cooperative tone whereby it agreed not to close the merger until the impasse was settled (yes, how very Canadian of them).

In context: Reuters reports that Canadian antitrust authorities have reviewed more than 1,500 mergers since 2009, and only challenged eight. It's record: Zero wins. Two pending. Six lost or settled.

• Again, this is less about the lawyers and more about the laws they're charged with enforcing.

The bottom line: We don't spend much time discussing Canadian deal activity. And it doesn't sound like that's going to change any time soon.