Selling a construction business in Quebec

The construction market in Quebec

Quebec's construction industry is governed by Loi R-20, which divides activity into four sub-sectors. Each one has its own market dynamics, collective agreements and buyer profile.

• Institutional and Commercial (IC) — The titan of the sector, accounting for more than half of all hours worked in 2025. Mega-hospitals, schools, urban redevelopment, office buildings. Concentrated buyers.
• Civil engineering and roadworks — Public infrastructure driven by the Quebec Infrastructure Plan, wind farm projects, and Hydro-Québec's transmission expansion. Heavy assets, public buyers, regulated margins.
• Residential (new build and renovation) — Recovering from the rate shocks: 60,800 housing starts forecast for 2026, up 3%. Exposure to the GCR warranty plan on new builds.
• Industrial — The volatile sub-sector: a 17% surge in 2025 driven by the battery sector, then a forecast 14% contraction in 2026 as several megaprojects are suspended. To be handled carefully in any buyer's projections.

From here, we're talking about SMEs in the sector — typically between $2 million and $30 million in revenue, where M&A activity in Quebec is most active, regardless of sub-sector.

Construction SMEs by the numbers

The industry hit an all-time high in 2025 with 216 million hours worked. The sector counts close to 28,000 employers covered by Loi R-20 and roughly 198,000 employees, for a total payroll of $10.2 billion.

Beyond the workforce, construction investment spending represents about $79 billion a year in Quebec. And the ecosystem is structurally fragmented: most employers count fewer than 50 employees, but a disproportionate share of activity is delivered by the largest players.

Forecasts for 2026 anticipate a modest pullback to 213.3 million hours (-1%). The market is running at two speeds: residential keeps growing, civil engineering stays supported by major infrastructure projects, but industrial is contracting and non-residential building permits dropped 16.9% in 2025.

Construction costs rose 65% since 2019, mainly driven by wages and labour scarcity. For larger players, organic growth through hiring has become too slow and expensive; acquisition is now a faster way to secure workforce, licences and trained teams.

For a seller, the buyer will challenge your ability to hold margins against rising costs. That's why a careful business valuation for a Quebec construction SME cross-checks several approaches rather than applying one multiple to raw EBITDA.

Sources: Commission de la construction du Québec, Perspectives 2026 — Industrie de la construction; CCQ, 2024 industry highlights; Institut de la statistique du Québec, housing starts and building permits 2025; Mouvement Desjardins (Economic Studies), why construction costs keep rising (October 2025); Innovation, Science and Economic Development Canada, construction industry statistics (Statistics Canada special tabulations).

Typical multiples

Construction covers very different realities — a general contractor in IC, an HVAC specialist running recurring services, and an excavator in light civil aren't valued the same way. The four Loi R-20 sub-sectors described above interact with your positioning (general or specialized, one-off projects or recurring services) to produce what buyers see.

The underlying logic — why valuation multiples vary from one industry to another — applies here with force. And before applying any range, normalized EBITDA must reflect realistic maintenance capex, market-rate rent, and a clean WIP adjustment.

What pushes the multiple up

• Recurring revenue (maintenance contracts, service calls, long-term relationships) — recurrence is the one factor that erases part of the WIP risk. A specialized SME billing 30% to 40% of its revenue in recurring service can easily command one to two extra turns of multiple over a pure project-by-project shop.
• An autonomous estimating and project management team — without the founder in the room. If you're the only estimator who can win profitable bids, the buyer models your departure as a clean loss of capacity, and finances that risk through a discount.
• A clean compliance record (CCQ, RBQ, CNESST, GCR) — no active infraction notices or claims reduces the risk profile, speeds up due diligence, and limits closing holdbacks.
• A profitable, well-framed backlog — documented change order clauses, proven remaining margins, locked-in subcontractors. Buyers pay for predictability, not raw volume.
• Exposure to growth segments — residential on the rise, civil engineering supported by the PQI, wind farms (Apuiat, Des Neiges 1), Hydro-Québec's transmission line expansion. A credible growth thesis translates into the high end of the range.

What pushes the multiple down

• Owner dependence as the lead estimator or key relationship holder — the buyer sees a capacity-loss risk and finances it through a discount or long transition clauses.
• Significant over-billing — the hidden WIP liability flows directly into the working capital adjustment at closing and cuts into the net proceeds you walk away with.
• An aging equipment fleet — the buyer factors in the upcoming replacement capex. A large obsolete fleet destroys more value than it creates.
• Open warranty or claims files (GCR, defects, deficiencies, active claims) — the buyer will require heavy escrows or robust indemnities to protect themselves.
• Excessive concentration on a single project owner (above 40% of revenue) — a post-acquisition rupture is too expensive not to be financed through a discount.

Sources: Capstone Partners, Construction Services M&A Coverage Report (North American mid-market); BMO, Middle Market M&A Update Q4 2025; RCA private transaction data and market experience; Demers Beaulne, market multiples as a valuation tool (October 2025).

Frequently asked questions — Selling a construction business