For Ontario dentists contemplating retirement, waiting for the “perfect” market may carry more risk than opportunity. Interest rates remain relatively stable (2.25% is currently the Bank of Canada’s overnight lending rate), qualified buyers are actively searching, and the Fall has historically been one of the strongest seasons in which to showcase a dental practice.
However, several economic warning signs suggest that today’s favourable selling conditions may not last.
The U.S. led war in Iran plus, the U.S. initiated trade-war with Canada has been having and will continue to have a direct impact on Canadian businesses and workers. Increased fuel costs raise inflation. Meanwhile, American tariffs threaten Canadian exports, while Canada’s retaliatory tariffs increase the cost of many imported goods and business inputs. Ontario is especially exposed because of its manufacturing base and close integration with American supply chains. The Financial Accountability Office of Ontario previously estimated that U.S. tariffs could result in tens of thousands of fewer Ontario jobs and raise the province’s unemployment rate materially compared with a no-tariff scenario. The Ontario government has also reported that approximately 285,000 provincial jobs are linked to U.S. exports.
What does this have to do with dentistry? Everything.
Job losses frequently mean the loss of employer-sponsored dental benefits. Families facing reduced hours, layoffs or higher household costs may postpone examinations, hygiene appointments and restorative treatment. Even patients who remain employed may have less disposable income for implants, orthodontics, cosmetic dentistry and other treatments that are not fully insured.
The trade war with the United States is also putting downward pressure on asset values generally and Ontario dental practice values specifically – by increasing economic uncertainty. This can shrink buyer demand as buyers decide to ‘wait out’ Trump’s last few years in office before jumping in to own. They’re looking at artificially increased construction costs for both doing their own startup or doing renos on an older practice they buy. That’s good enough reason for some buyers with less risk appetite or greater exposure to higher interest rates to wait it out and not immediately start or buy a practice (especially as inflation can start to creep up in the real world – particularly in 2027 should Trump follow through on his 50% tariff threat).
The Canadian Dental Care Plan (“CDCP”) has unquestionably been a boon to many dental practices and has helped millions of Canadians access treatment. Nevertheless, the CDCP cannot entirely insulate dentistry from a broader economic downturn. If businesses that rely heavily upon trade with the United States suffer financial setbacks, fewer jobs, reduced benefits and weaker consumer confidence may ultimately affect practice revenue. The federal government’s own statistics confirm the CDCP’s substantial reach, but coverage levels, co-payments and eligibility rules mean it is not a complete substitute for private insurance or discretionary spending.
Interest Rates Could Reduce Tomorrow’s Practice Values
The Bank of Canada has been attempting to balance weak economic growth against continuing inflationary pressure. Its July 2026 outlook projected inflation declining toward approximately 2%, but uncertainty remains elevated.
The Bank’s inflation target is centred on 2%. If tariffs, supply disruptions, wages and other costs keep inflation above that level, higher interest rates remain one of the Bank’s principal tools for restraining demand and bringing inflation under control. Some economists now expect interest-rate increases during 2027, although no forecast is guaranteed. The C.D. Howe Institute’s Monetary Policy Council, for example, recommended maintaining the policy rate into early 2027 before increasing it later that year.
Higher rates matter directly to dental-practice sellers. Most purchasers finance a substantial portion of the purchase price. When borrowing costs rise, buyers can service less debt from the same practice cash flow. Lenders may become more conservative, purchasers may demand lower prices, and transactions that would work today may no longer satisfy financing requirements. A practice’s clinical value may not have changed, but its financeable purchase price may decline.
Operating pressures are also mounting: as inflation rises, there’s pressure coming from staff to increase wages. And there’s already been a shortage of finding and keeping qualified staff since COVID-19. We know of some practices that have been unable to keep hygienists and have consequently required the dentists themselves to perform hygiene cleanings. That reduces the dentist’s capacity to provide higher-value treatment, restricts growth and may make ownership less attractive.
Landlords present another obstacle. Increasingly, landlords are insisting upon demolition clauses in lease renewals, assignments and consent documents. These provisions can leave a buyer without dependable long-term premises and can make lenders reluctant to finance an acquisition. A profitable practice with an unstable lease is considerably harder to sell.
Why Fall 2026 Is The Opportunity
Anecdotally, the changing seasons bring motivated purchasers back into the market. Buyers who spent the summer waiting for prices to stabilize are now searching for growth opportunities and value purchases. Rates remain stable for the moment, and a properly positioned practice can attract attention before the risks expected in 2027 become reality.
Timing can also provide a tax-deferral advantage. A seller who lists in fall 2026 but completes a share sale in January 2027 will generally report the resulting disposition in the 2027 taxation year. Subject to the seller’s circumstances, structure and professional tax advice, the related personal tax balance would ordinarily become payable in spring 2028—not spring 2027. That does not eliminate tax, but it may defer the payment by approximately one year.
Bottom Line
The market is still moving. Financing is still available. Buyers are looking. For dentists who already know that a sale is approaching, fall 2026 may be the time to act—before higher rates, economic uncertainty and operational pressures begin determining the value of their life’s work.
About Us
DMC LLP offers sellers a true one-stop shop. No real estate agent is required to sell the dental practice itself. We market and showcase the practice, organize and control due-diligence materials, negotiate the transaction and prepare the legal documents. We also handle lease transfers, employment matters and complex corporate reorganizations required to clean up the dentistry professional corporation before closing, while coordinating with the seller’s accountant.
Thinking about selling your dental practice? Speak with DMC LLP about positioning, showcasing and completing your sale efficiently. We do it all.
