Insights for owners of privately held businesses in Western Canada

Building on last months Deal Brief, we are continuing to see some optimism across Western Canada.  October seems to be the “month of networking” as our inboxes have been filled to interesting and fun events.  Thanks to everyone who has invited us out over the past month.  There is certainly some cautious optimism for 2027 already building (or maybe its just the hope to put 2026 in the rear-view mirror).   We also have a bunch of announcements this month that are applicable to SME business owners, so this edition is a bit longer than our previous postings.

As a reminder, this newsletter is intended for owners and entrepreneurs of manufacturing, oilfield services, and industrial businesses in Western Canada (but hopefully also appeal to a wider audience).   Our Deal Brief focuses on one goal: helping owners create value in their business.  It’s intended to be short, insightful and we want to introduce news, topics and ideas that you may not otherwise have been exposed to, particularly as it relates to selling a business.  We hope you enjoy it.

The Western Canadian M&A Lens

What buyers, sellers and investors are doing across Western Canada.

Over the past 30 days, oilfield services buyers kept buying specific skills, mostly in electrical, instrumentation and automation (E&I). On October 5, Calgary’s Control Tech announced it had bought Alcro Electric, an Airdrie electrical contractor founded in 1997 that specializes in modular construction and industrial electrical work (BOE Report). Noralta Technologies bought Lloydminster’s ARG Group last month and is now looking south: it acquired the assets of Seven H Solutions, an automation services company in Kilgore, Texas (BOE Report). The month’s largest private oilfield services deal came from a U.S. strategic. Flowco closed its purchase of Edmonton artificial-lift manufacturer Lifting Solutions on October 2 for C$159 million in cash (World Oil). Canadian acquirers are also writing bigger cheques. Mergermarket/Datasite data shows Canadian industrial bidders did 74 deals in H1 2026, up about 10%, while their total deal value rose more than sixfold.

On the sell side, two themes stood out. First, private equity is selling and reinvesting. Lifting Solutions was backed by Calgary’s ARC Financial (SEC filing). On October 22, Power Corporation’s private equity platform bought Richmond-based food manufacturer Fine Choice Foods, which has over 300 employees, from U.S. firm Swander Pace Capital. Farm Credit Canada, Bonnefield and senior management all co-invested (BNN Bloomberg). That fits RBC’s Q3 data: private equity made up 71% of its 2026 buyers and Canadian buyers 86%. Second, more of the price now depends on what happens after closing. Lifting Solutions’ sellers can earn up to C$10 million more based on 2027 results. Seven H’s founder has joined Noralta to run its Tyler, Texas operation. Above our $250M cap, one deal is worth watching. Emera’s $14.3 billion takeover of Canadian Utilities will spin ATCO’s non-utility businesses into a new Calgary-based public company, which could become a new buyer in the region (CBC).

The practical takeaway for owners: activity is strong. WTI settled at US$101.41 on October 16, up more than 10% on the week (EnergyNow), and Canada had 217 active drilling rigs that week, 19 more than a year earlier (Baker Hughes). Even so, buyers are using earnouts and founder roles to protect themselves on price. An earnout tied to 2027 is only as good as your forecast and your control after closing. Before you sign, settle three things: how EBITDA is defined, which accounting policies apply, and what the buyer commits to (capex, headcount) during the earnout period.

Exit Ready

Practical advice to increase value before selling your business.

Reduce Owner Dependency

Private companies that continue performing without the owner present day-to-day command materially higher valuations, because buyers pay a premium for businesses that don’t require the founder to run them. Owner dependency comes in two forms — driving revenue personally, or running internal operations personally — and revenue dependency is the more serious of the two, since buyers will tolerate operational bottlenecks far more readily than fragile client relationships.

For oilfield services owners, this often means being the one who personally answers every call from a major operator client or approves every field dispatch decision; for manufacturers, it may mean being the sole person who understands custom equipment specifications or a key vendor relationship. Buyers interpret this as fragility, and it shows up in negotiations as extended earnouts, longer post-close employment requirements, and lower headline price.

The tactical fix is a deliberate handoff plan: transfer ownership of at least one major client relationship per quarter to a named team member, document sales and onboarding processes so they aren’t dependent on the owner’s personal network, and make visible progress on a management succession plan that a buyer can see and diligence.

Building Enterprise Value

The decisions that make businesses more valuable.

Formalize Financial Reporting Cadence

Many owner-run businesses review financials informally or reactively, checking the bank balance rather than reviewing a structured monthly package of P&L, balance sheet, and cash flow against budget. Moving to a disciplined monthly close and review cadence, ideally within 10-15 business days of month-end, creates the data owners need to actually manage the business rather than just observe it.

This matters because businesses with disciplined financial reporting habitually catch margin erosion, cost overruns, or collection problems months earlier than businesses that only look closely at year-end, and that speed of detection directly protects EBITDA. Lenders and equity partners also price risk based partly on reporting discipline itself.

The tactical step: implement a standard monthly reporting package — P&L versus budget, AR aging, cash position, and 2-3 operational KPIs — reviewed with the accountant or CFO within two weeks of every month-end, with variances over a set threshold requiring a written explanation.

What Owners Need to Know

Tax, regulation, financing and AI developments affecting private businesses.

AI — Ottawa adds $500 million to help businesses adopt AI

On October 13, Ottawa added $500 million over five years to the Regional Artificial Intelligence Initiative (RAII), bringing its total to $700 million (ISED). The program is run by the regional development agencies, PrairiesCan and PacifiCan in Western Canada. Its priority sectors include energy and natural resources, transportation, manufacturing and robotics. RAII is separate from BDC’s LIFT financing program, which we covered earlier.

In the Prairies, the terms are (PrairiesCan):

  • Project size: PrairiesCan contributes $250,000 to $5 million per project, over up to three years.
  • Funding type: For-profit businesses receive interest-free, repayable funding for up to 50% of eligible costs.
  • How to apply: Applications are accepted continuously. You start with a short expression of interest (EOI), and PrairiesCan invites selected applicants to a full application within 30 days (PrairiesCan).

The kinds of projects that qualify are practical ones. They include AI implementation, automation, predictive analytics, data modernization and process optimization (ACOA).

What it means for owners: a Red Deer fabricator automating its quoting and scheduling could fund half the project at 0% interest. So could an oilfield service company building predictive maintenance off its fleet data. Keep in mind:

  • It’s a loan, not a grant, and a buyer will treat any unpaid balance as debt when setting the purchase price.
  • If a sale is possible in the next few years, read the contribution agreement’s assignment and change-of-control terms before you sign.
  • Done well, an AI project with measurable cost savings gives you a credible EBITDA story to tell buyers.

Tax — The $10 million employee ownership trust exemption is now permanent

Selling your business to an employee ownership trust (EOT) lets you exempt up to $10 million of capital gains (Finance Canada). The exemption was due to expire at the end of 2026. It became permanent through Bill C-30, which received Royal Assent on June 18 (Bennett Jones).

In an EOT, a trust buys the company’s shares and holds them for the benefit of the employees. Employees don’t put up their own money; the purchase is typically paid for out of the company’s future profits. Key conditions include (Miller Thomson):

  • The trust must be resident in Canada and exist only for the benefit of current or former employees.
  • The business must generally be actively operating in Canada.
  • Loans from the company to the trust can be repaid over up to 15 years without triggering tax.

What it means for owners: the year-end deadline is gone, so an EOT is now a lasting exit option alongside a strategic sale, private equity, a management buyout or a family transition. But the tax savings are only half the picture:

  • An EOT generally pays fair market value, but most of the price is usually paid over time out of the company’s cash flow. That means the seller carries the credit risk for years, unlike a cash sale at closing.
  • The right comparison is the after-tax, risk-adjusted proceeds of each option, not the headline price.
  • EOTs suit stable, cash-generating businesses with a capable second layer of management. A cyclical oilfield service company with heavy capital spending is a harder fit.

If you’re considering one, get advisors experienced with EOTs involved early, since the conditions are technical.

Employment Insurance — Temporary EI relief extended to October 2027, including for parental leave

Ottawa has extended its temporary EI measures by another year. The changes came into force on October 11, 2026 (Hicks Morley). The key measures are (Service Canada):

  • No waiting period: the usual one-week unpaid waiting period is waived for all new EI claims starting between March 30, 2025, and October 9, 2027.
  • Severance doesn’t reduce EI: for claims in the same window, severance, vacation pay, pay in lieu of notice and similar separation payments are not deducted from benefits.
  • Extra weeks for long-serving workers: claims starting between June 15, 2025, and June 12, 2027, can receive 20 additional weeks of regular benefits, up to 65 weeks in total.
  • Most recent job only (new): for claims starting between October 11, 2026, and October 9, 2027, Service Canada reviews only the reason the person left their most recent job.
  • For employers: special Work-Sharing measures run until March 31, 2028.

Thanks to Hailey Adlar, President of Gilker McRae (Hailey Adlard | LinkedIn) for pointing out on LinkedIn a detail many owners will miss. The waiting-period waiver isn’t limited to layoffs. It also covers maternity and parental claims, so new parents are paid from their first week of leave (EBSource).

What it means for owners:

  • Check your top-up plan. If you top up maternity or parental leave through a Supplemental Unemployment Benefit (SUB) plan, look at how it treats the waiting week. Many plans pay salary during that week because EI normally doesn’t. Service Canada notes an employee may choose to serve the waiting period anyway if a top-up makes that worthwhile. Have your benefits advisor confirm your plan wording still works as intended.
  • Restructuring before a sale costs employees less. Severance and pay in lieu of notice no longer reduce employees’ EI. That makes a workforce reduction a little less painful for the people affected.
  • Work-Sharing is an alternative to layoffs. It lets you keep trained crews through a slowdown rather than losing them. For a buyer, a stable, retained workforce is worth more than one rebuilt after layoffs.

Financing — Banks pledge $325 billion for Canadian business, and Ottawa’s sovereign fund takes shape

The groundwork was laid in June. OSFI, the federal bank regulator, cut the Domestic Stability Buffer, a capital cushion the six largest banks must hold, from 3.5% to 3.0% of risk-weighted assets (OSFI). OSFI estimates the banks’ capital above its 11% minimum at about $74 billion. That is enough to support roughly $673 billion of additional lending and other risk assets. OSFI named the sectors it expects the capital to support: defence and security, critical infrastructure, resources and artificial intelligence.

The banks followed through at September’s Canada Investment Summit, committing nearly $325 billion in new financing (Prime Minister’s Office):

  • TD: $150 billion over five years across energy, critical minerals and resources, defence and aerospace, digital and AI, and infrastructure.
  • Scotiabank: over $100 billion over five years for companies and projects in key growth sectors.
  • BMO: up to $70 billion in new capital over 10 years (Financial Post).
  • CIBC and RBC: CIBC committed $2 billion to defence businesses (The Logic), and RBC launched a US$1 billion fund for Canadian technology companies (Startup Researcher).

Separately, the Canada Strong Fund, Canada’s first sovereign wealth fund, is being set up with $25 billion of federal money over three years (Finance Canada). It will be run by a new Crown corporation with its own CEO and an independent board, at arm’s length from government. It will invest alongside private capital in projects including clean and conventional energy, critical minerals, agriculture and infrastructure (Department of Finance). Many details still depend on legislation and the fund’s Transition Office (Gowling WLG).

What it means for owners:

  • Most of this money targets major projects, not $20 million businesses. Smaller projects are still having trouble getting financing (The Logic). The more direct opportunity for most of our readers is the supply chain: fabricators, oilfield service companies and industrial contractors that will build and maintain these projects.
  • Use the pledges in your banking talks. Banks now have public targets to hit in energy, resources, infrastructure and defence. If your business serves those sectors, raise that at your next credit review or facility renewal. It is a reasonable basis to ask for more room or better terms.
  • Acquisition financing should be easier to get. When banks are competing to lend, buyers can borrow more for acquisitions. That supports valuations for well-positioned businesses in these sectors and is worth considering when you think about sale timing.

Closing Note

If you made it all the way to the end of this post – Thank You!  We hope you are finding the Deal Brief an informative and enjoyable read.  As a reminder, Redcap&Truss is a Calgary-based boutique M&A advisory firm that advises entrepreneurs on the sale or growth of their businesses.  Redcap&Truss focuses on manufacturing, oilfield services and other industrial business in Western Canada, with our typical client having revenues between roughly $15 million and $200 million and EBITDA above $3 million. Please connect with us on LinkedIn or via our website at www.redcapandtruss.com.