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uncertainty around NAFTA can be
expected to create some headwinds."
The US is by far Canada's largest trading
partner, so even if a Canadian company
isn't directly affected by NAFTA, it likely
trades with others that are.
But at the same time, down in the
trenches of M&A, the impact of NAFTA
uncertainty on deal activity seems mini-
mal. Equity values are soaring, cash is plen-
tiful and investors are upbeat. For many
M&A practitioners, these are good times.
Indeed, says Graves, deal flow in 2017 was
"largely unaffected" by President Trump's
NAFTA comments.
According to data from Thomson Re-
uters, activity in the first nine months of
2017 (the most recent figures available)
reached their highest level since the finan-
cial crisis, with transaction value rising to
$209.7 billion, up 17 per cent from the
prior year, helped by a strong economy and
rising confidence.
"From my perspective in the areas
that I work in, [M&A players] aren't re-
ally giving a whole lot of thought about
NAFTA," says Alicia Quesnel, a partner
at Burnet, Duckworth & Palmer LLP.
Based in Calgary, Quesnel focuses on
the Energy sector, where she's involved
primarily in M&A for large and mid-size
companies. Despite languishing crude
prices, the sector continues to be active as
companies look to diversify and take ad-
vantage of historically low prices:
"You know, NAFTA is interesting,"
she says, but the Energy sector has much
more immediate concerns, such as the
price of oil. "With the oil industry you're
talking about global markets and com-
modity prices. That's the big determinant
for how much you're going to get paid for
your product. Some of our biggest issues
are pipeline constraints and how do you
get to markets that are more lucrative. If
we can't get our product to market, [that's
a problem]."
That's a common perspective in re-
source sectors where prices are set globally,
and especially in mining where Canadian
companies are leading competitors, operat-
ing around the world. When your custom-
ers are in places like Europe and Asia, why
get over-concerned with what's happening
in the US? "Clearly, uncertainty about
NAFTA could be detrimental [to M&A]
but of course it depends on the industry
you're in," says Jeremy Fraiberg, a partner
at Osler, Hoskin & Harcourt LLP and co-
chair of the firm's M&A group.
Jonathan Feldman, a partner at Good-
mans LLP, says his firm's M&A practice
was the busiest it's ever been for much of
last year, and that looks set to continue,
despite the dark clouds over Washington.
Clients are wary of the situation, but as
long as it's unresolved they have no choice
but to react to real and existing factors.
"I think tax reform [in the US] is super-
charging confidence, and if you look at it
in the US, deal-making is off the charts,"
he says. "M&A activity is as robust as it's
ever been, and it's mega-deals — they're
doing huge deals right now. The M&A
market in the US has been on fire."
Part of the reason the environment in
Canada is so buoyant is that the optimis-
tic mood is spilling over from the United
States. "The Canadian economy is doing
really well," says Davies' Shishler. Compa-
nies have fixed their balance sheets, there's
a lot of liquidity, the banks are willing
to lend. These macroeconomic factors
helped propel the M&A market in 2017
and "when you reach out to investment
bankers, there's a great deal of optimism
around what 2018 will look like."
Cameron Belsher, a partner at McCar-
thy Tétrault LLP and head of the firm's
M&A group, says his clients are putting
their NAFTA concerns to one side.
There's "an overwhelming feeling from
our clients of business as usual right now,"
he says. "You have to think about [the
future of the trade agreement] — it's going
to be a factor, but right now there are so
