At our recent annual leadership conference, Evolve, BDO Canada's industry leaders discussed key trends, challenges, essential strategies, and growth opportunities for Canadian businesses.
In particular, the conference highlighted the importance of leveraging technological advancements to drive innovation and efficiency. It also focused on topics such as AI, and the integration of sustainable practices within business operations. Our leaders emphasized the need for continuous learning and adaptation to stay ahead in a competitive market.
Learn more about the key trends and issues that will impact your industry, as well as some of our insights that take a deeper dive.
The consumer business sector is facing a multitude of transformative changes and hurdles. Shifts in consumer spending, e-commerce growth, and ongoing supply chain disruptions are poised to impact business strategies, while rising costs of goods and labor shortages will challenge profitability. Also, new consumer protection laws, trade policy changes, and adjustments to tax and minimum wage regulations will significantly affect operations. Compliance with health and safety standards, environmental regulations, advertising standards, and data privacy laws present notable regulatory challenges.
"In light of challenging times, marked by geopolitical turbulence and inflation impacting consumer spending patterns, we remain optimistic about the future growth and resilience of the consumer business sector. Consumer businesses can bolster their market position by having the right financial planning strategy and securing their investments with proper cybersecurity and compliance."
The financial services sector is navigating a challenging environment shaped by significant economic trends such as interest rate fluctuations, digital banking transformation, economic uncertainty, inflation and credit market volatility. Political developments such as potential updates to financial regulations, consumer protection laws, anti-money laundering (AML) policies, and cybersecurity legislation, will further influence the sector. Meanwhile, regulatory challenges are also growing, with stricter compliance on privacy, data protection, AML, and capital adequacy requirements.
"Across financial institutions, we are seeing the consistent need to upgrade technology to meet the sector’s unique cyber and risk management regulations, in addition to: consumer expectations for secure data management and cost management. To help financial services institutions prepare for tomorrow, BDO can help with the accelerated adoption of Cloud, the implementation of AI, and OSFI B13/E23 compliance activities."
The manufacturing sector is poised to be influenced by significant economic trends including ongoing global supply chain disruptions, the rapid adoption of digital technologies such as AI and IoT, rising energy costs, and persistent labour shortages affecting production capabilities and costs. Canada-U.S. trade relations, federal carbon tax adjustments, and new workplace safety regulations will play crucial roles, alongside infrastructural investments and provincial incentives aimed at bolstering the sector. Manufacturers will also need to tackle stringent environmental regulations, enhanced safety standards, and complex tax compliance issues in the coming years.
"Following a disruptive few years for the manufacturing industry, predominantly led by global supply chain disruptions and inflation impacts, manufacturers can now invest further in technology to mitigate future disruption and streamline operations to create greater efficiencies across the industry. With continuing labour shortages and evolving ESG compliance requirements, embracing innovation will ultimately strengthen our industry's resilience and future growth."
Listen to BDO’s PE Market Pulse for private equity insights into Manufacturing.
The private equity sector is poised for growth and innovation, driven by continued focus on value creation, strategic bolt-on acquisitions, and adapting to evolving regulations such as ESG standards. While deal activity in 2024 has been moderate, sector consolidation is accelerating, particularly in fragmented industries, along with an increase in go-private transactions. With the largest generational transfer of wealth in Canadian history currently underway and record amounts of dry powder available, firms are well-positioned to capitalize on opportunities.
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"Private equity continues to be an important part of our economy, driving the growth of Canadian businesses nationwide. As interest rates stabilize further, we expect deal activity to increase in 2025, with private equity firms exiting some of their overdue investments and deploying capital for add-ons and new acquisitions. Private equity investment will continue in key sectors such as technology, life sciences, manufacturing, distribution, healthcare, retail and consumer business."
Economic trends such as rising interest rates, shifting housing demand, and increasing construction material costs are having a significant impact on the real estate and construction sectors. Continued urbanization and government infrastructure investment are driving demand for residential and commercial developments. Affordable housing policies, stricter environmental regulations, and changes to land use laws are set to shape the industry, while public-private partnerships (PPP) and foreign investment controls also influence market conditions. Regulatory challenges include adapting to new building codes, environmental assessments, and evolving tax policies.
"The Canadian real estate market is poised for significant change. Driven by a combination of political, economic, technological, and regulatory developments, it is critical for the industry to transform, to meet the moment, and take advantage of the opportunities ahead."
CEOs and CFOs in the technology, media, and telecommunications sector are most concerned about the increasing frequency and sophistication of cyber attacks, cost of digital transformation, talent acquisition and retention challenges, regulatory compliance and intensifying market competition. Key economic trends shaping the industry in the next 12 to 24 months include increased investments in digital infrastructure, strong venture capital interest in fintech and AI, and ongoing tech sector consolidation. Additionally, evolving political and regulatory factors such as data privacy laws, new digital services taxation, content regulation, and foreign investment restrictions are likely to impact the technology, media, and telecommunications landscape underscoring the need for strategic industry support.
Listen to BDO’s PE Market Pulse for private equity insights into Technology, Media and Telecommunications.
"The technology, media, and telecommunications (TMT) sector is always an interesting and rapidly evolving space. Looking ahead, the evolution will only continue, and TMT companies will need to navigate AI-driven transformation and increasing cybersecurity risks while staying ahead of new laws and regulatory requirements."
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