EY-Parthenon CEO Outlook Survey Fall 2025: Key Findings on M&A, AI Risk, and Business Confidence

Survey Overview and CEO Confidence Index

The EY-Parthenon CEO Outlook Survey, produced in collaboration with FT Longitude, represents one of the most comprehensive barometers of executive sentiment in the Canadian business landscape. The Fall 2025 edition surveyed 50 CEOs across Canada’s key industries—consumer and health, financial services, industrials and energy, infrastructure, and technology, media, and telecommunications—during August 2025. The results paint a picture of resilient confidence tempered by strategic recalibration in the face of technological disruption and geopolitical complexity.

Compared to the May 2025 wave, the Fall 2025 results show a marked improvement across multiple confidence indicators. CEO sentiment on company growth drivers, pricing strategy, and talent acquisition all shifted positively, suggesting that business leaders are not merely surviving uncertainty but actively capitalizing on it. This upward trajectory in executive confidence arrives at a critical juncture, as global economies navigate the intersection of rapid AI advancement, shifting trade policies, and evolving supply chain architectures.

The survey’s methodology ensures broad sectoral representation while focusing on decision-makers with direct influence over corporate strategy. By tracking responses over consecutive waves, EY-Parthenon creates a dynamic picture of how CEO priorities evolve in real time, making this survey an invaluable resource for investors, policy analysts, and strategic planners seeking to understand the direction of Canadian business leadership. The findings resonate beyond Canada, reflecting broader patterns visible in global technology leadership trends analyzed by major consulting firms.

CEO Optimism About Economic and Company Outlook

The headline optimism figures from the survey are striking. A full 92% of Canada’s business leaders express very or somewhat optimistic sentiments about Canada’s economic outlook, reflecting a broad consensus that the national economy has stabilized despite persistent external uncertainties. At the company level, 90% are very or somewhat optimistic about their own revenue trajectories, cost management capabilities, and competitive positioning.

Perhaps most remarkable is the investment confidence metric: 98% of surveyed CEOs are very or somewhat optimistic about their investment capital or free cash flow outlook. This near-universal confidence in financial capacity signals that Canadian firms are well-positioned to pursue growth opportunities, whether through organic expansion, acquisitions, or technology investments. The strong cash flow expectations suggest robust balance sheets and effective capital management practices across the surveyed firms.

The improvement in talent-related confidence is equally noteworthy. CEOs report growing optimism about their ability to attract and retain top talent, offer competitive compensation packages, and invest in both emerging and established technologies. These human capital indicators are particularly significant in the context of EY’s broader research showing that talent strategy is increasingly intertwined with technology strategy, as firms compete for workers capable of leveraging AI and digital tools effectively.

M&A Transaction Activity Surges Among CEOs

One of the most dramatic findings in the Fall 2025 survey is the extraordinary surge in M&A intent. Fully 76% of Canadian CEOs plan to pursue M&A transaction activities within the next 12 months, representing a more than doubling of intent from the 36% recorded in the May 2025 wave. This sharp acceleration indicates that CEOs have moved decisively from a cautious, wait-and-see posture to an active deal-making mindset.

The drivers behind this M&A surge are multifaceted. With strong cash flow expectations and improved economic confidence, CEOs are seizing opportunities to acquire complementary capabilities, expand market presence, and consolidate competitive advantages. The rise in M&A intent also reflects a strategic response to technological disruption—rather than building all capabilities in-house, many firms are choosing to acquire AI expertise, digital platforms, and innovative product portfolios through transactions.

This trend aligns with broader patterns observed in global capital markets, where deal volumes have been recovering after a period of suppressed activity. For stakeholders evaluating the Canadian business landscape, the M&A data suggest an environment of active portfolio optimization, with firms willing to make bold strategic bets on future growth vectors. The implications extend to private equity, investment banking, and advisory services, all of which stand to benefit from increased transaction activity.

Technology Disruption and AI as Top Business Risk

In a significant shift from previous survey waves, technology disruption and AI integration have emerged as the foremost challenge to meeting financial targets, cited by approximately 30% of CEOs as their top concern. This displacement of geopolitical and trade tensions from the top risk position marks a pivotal moment in executive risk perception: the primary threat is no longer external political instability but rather the internal challenge of adapting to rapid technological change.

The elevation of AI risk reflects the dual nature of artificial intelligence in corporate strategy. While CEOs recognize AI’s transformative potential for driving innovation and efficiency, they simultaneously face immense pressure to integrate these technologies effectively. The costs of AI implementation, the scarcity of qualified talent, the risks of failed deployment, and the competitive pressure from early adopters create a complex risk landscape. Companies that fail to successfully integrate AI face not just missed opportunities but active competitive disadvantage as peers leverage these tools for product innovation and operational improvement.

This finding echoes research from institutions like Brookings, which documents how AI adoption creates significant divergence between firms that invest successfully and those that do not. The strategic challenge for CEOs is not whether to adopt AI but how to do so effectively while managing the considerable integration risks. Organizations that approach AI as a core strategic initiative rather than a technology add-on are better positioned to navigate these challenges, as explored in our analysis of how AI is reshaping global competitive dynamics.

Localization and Regionalization Strategies

The survey reveals that localization and regionalization have become mainstream strategic responses to geopolitical uncertainty. Approximately 88% of Canadian businesses have completed, are currently implementing, or have definite plans to implement localization strategies. This near-universal adoption rate demonstrates that supply chain and operational resilience have moved from theoretical discussion to practical implementation across Canadian industry.

Importantly, CEOs view these shifts as long-term strategic commitments rather than temporary tactical adjustments. Approximately 63% characterize localization as a long-term strategic shift, while 66% view regionalization similarly. This permanence suggests a fundamental restructuring of global business operations rather than a cyclical response to transient political events. The functional scope of these strategies extends across multiple business areas, including technology and data, sales and marketing, research and development, finance, compliance, talent governance, and operations and supply chain management.

The key enablers for successful localization and regionalization include the level of innovation available in target markets, availability of financing, and favorable market conditions. However, significant challenges persist: energy costs, labor availability, and regulatory environment complexity all present obstacles that require careful strategic navigation. These findings suggest that while the commitment to localization is strong, execution requires sophisticated planning and ongoing adaptation to local conditions.

CEO Responses to Tariff Uncertainty

With tariff uncertainty remaining a significant concern, CEOs have developed nuanced response strategies that prioritize operational efficiency over geographic restructuring. The leading response to potential new or increased tariffs is investing in efficiency and automation to offset higher input costs, cited by 24% of CEOs. This preference for internal optimization over external restructuring reveals a pragmatic approach: rather than undertaking costly and disruptive supply chain reconfigurations, firms are focusing on making their existing operations more resilient and cost-effective.

Policy and trade advocacy ranks as the second most common response at 20%, indicating that CEOs are actively engaging with government institutions to influence trade policy outcomes. Managing knock-on effects (20%) and adjusting pricing, products, or service offerings (18%) round out the top strategic responses. Notably, refocusing market strategy (14%) and reconfiguring supply chains through nearshoring or reshoring were comparatively low priorities, suggesting that most firms view geographic restructuring as a last resort rather than a first response to tariff pressures.

This hierarchy of responses has important implications for policymakers. The strong preference for automation and efficiency investment suggests that tariff pressures may actually accelerate technology adoption, potentially amplifying the workforce composition shifts documented in labor market research. For industry strategists, the data indicate that firms are betting on operational excellence as the most effective hedge against trade policy volatility, rather than attempting to outrun tariffs through geographic relocation.

Portfolio Transformation Acceleration

The survey reveals a decisive acceleration in portfolio transformation activities. Fully 54% of CEOs plan to increase investment to accelerate portfolio transformation, while 42% plan to maintain transformation at recent levels. Only 4% plan to pause transformation activities, meaning that a combined 96% of Canadian CEOs are actively pursuing strategic portfolio evolution. This near-unanimous commitment to transformation underscores the recognition that standing still in today’s rapidly evolving business environment is equivalent to falling behind.

The primary driver for portfolio transformation is improving financial performance, cited by 41% of CEOs. This pragmatic focus on results suggests that transformation is being pursued not as an abstract strategic exercise but as a concrete means of enhancing revenue, margins, and shareholder value. Secondary drivers include focusing on core capabilities (15%) and long-term value creation (10%), while geopolitical and regulatory exposure, complexity reduction, technology disruption, and ESG considerations serve as additional motivating factors.

The scope of transformation extends beyond simple asset optimization. CEOs are rethinking entire business models, reconsidering which markets to compete in, and evaluating which capabilities to develop internally versus acquire externally. This comprehensive approach to transformation creates significant implications for the broader economy, as resources are reallocated from legacy operations to growth areas, with corresponding effects on employment, investment patterns, and industry structure across the Canadian economy.

Financing Transformation and Capital Strategy

How CEOs plan to finance their transformation activities reveals important insights about corporate financial strategy. The dominant approach is internal generation: 58% of CEOs expect to finance transformation by increasing revenue or improving margins. This self-funding preference reflects both the strong cash flow confidence reported earlier and a strategic aversion to increasing financial leverage or ownership dilution during a period of ongoing uncertainty.

External financing plays a secondary but meaningful role. Raising new capital from existing or new shareholders accounts for 19% of financing plans, while debt and bank loans represent 17%. Asset sales—divesting non-core businesses to fund strategic priorities—account for 6%. This financing mix suggests a conservative but confident capital strategy: firms prefer to grow their way into transformation rather than leveraging their balance sheets, but they maintain flexibility to access external capital when opportunities demand it.

The preference for internal financing has broader economic implications. Companies focused on margin improvement and revenue growth are likely to invest heavily in operational efficiency technologies, including AI and automation systems, creating a positive feedback loop where transformation funding and technology adoption reinforce each other. For the financial services sector, the relatively modest reliance on external capital may temper expectations for corporate lending growth, though the active M&A environment should generate substantial advisory and financing demand, as reflected in insights from OECD analysis of venture capital and AI investment trends.

Geopolitical Uncertainty and Long-Term Planning

Despite their overall optimism, CEOs maintain a sober assessment of the geopolitical landscape. The majority of surveyed leaders expect elevated geopolitical and economic uncertainty to persist for more than one year, with the most common estimates ranging from one to three years or longer. This recognition of sustained uncertainty is driving the strategic investments in localization, diversification, and operational resilience documented throughout the survey.

The persistence of geopolitical uncertainty creates a planning paradox for business leaders: they must make long-term strategic commitments—in technology, talent, and geographic presence—while operating in an environment where trade policies, regulatory frameworks, and international relationships may shift unpredictably. The CEOs surveyed appear to be resolving this paradox by building flexibility into their strategies, investing in capabilities that provide value across multiple scenarios rather than betting on any single geopolitical outcome.

This approach to strategic planning under uncertainty aligns with best practices in scenario-based strategy development. By maintaining diversified portfolios, investing in adaptable technologies like AI, and building resilient supply chains through localization, Canadian CEOs are positioning their organizations to thrive regardless of how geopolitical dynamics evolve. The consistent theme is resilience through flexibility rather than through prediction.

Strategic Implications for Business Leaders

The EY-Parthenon CEO Outlook Survey Fall 2025 delivers a clear message for strategic decision-makers: Canadian business leaders are confidently navigating a complex operating environment by combining operational resilience with aggressive growth strategies. The data suggest several actionable insights for leaders across industries and geographies seeking to align their strategies with prevailing executive sentiment.

First, the dramatic surge in M&A intent signals that competitive landscapes are about to shift. Organizations not actively pursuing acquisitions should prepare defensively for industry consolidation while identifying potential partnership or acquisition opportunities that could strengthen their competitive positions. Second, the elevation of AI integration risk to the top of the CEO concern list underscores that technology strategy is no longer a separate workstream but a core component of corporate strategy requiring board-level attention and dedicated resources.

Third, the commitment to localization and regionalization suggests that firms relying on highly centralized or geographically concentrated operations face increasing vulnerability. Building distributed operational capabilities, even at modest scale, provides resilience against supply chain disruptions and trade policy changes. Finally, the preference for self-funded transformation through revenue growth and margin improvement highlights the importance of operational excellence as a foundation for strategic ambition. Organizations that can simultaneously improve current operations while investing in future capabilities will be best positioned to capitalize on the opportunities that this period of dynamic change presents.

For those seeking deeper analysis of how CEO strategy intersects with geopolitical disruption patterns, our interactive library offers comprehensive research coverage across these interconnected domains.