KPMG reveals two-thirds of firms have already raised prices to cover US tariff costs
Just over half of Canadian business leaders expect the federal government's economic measures to leave their firms better off within three years, though many want those commitments to translate into faster action.
That finding comes from KPMG's National Business and Trade Outlook survey of 359 business leaders and decision-makers, which reported that 51 percent expect to be "much better off" or "somewhat better off" over the next three years.
More than half (55 percent) believe the government is making progress in strengthening support for Canadian businesses.
KPMG conducted the poll shortly before the US threatened a 50 percent tariff on certain Canadian exports and announced a new 10 percent "forced labour" tariff, the firm noted, meaning the results predate both measures.
Lachlan Wolfers, national leader of KPMG Law, said many Canadian businesses are holding off as US trade pressure grows, waiting to see how the latest tariffs shake out before reacting.
He added that leaders want governments to focus on what Canada can control to build economic resilience.
Optimism carried caveats.
Of those surveyed, 14 percent expect to be much better off and 36 percent somewhat better off, while 31 percent anticipate no material impact and 15 percent expect to be somewhat worse off or worse off.
Investment intentions hinge on support.
Nearly half (47 percent) said they are confident in their firm's ability to increase investment in Canada if backed by "Buy Canadian" procurement, government incentives and new financing.
Tariffs are already reshaping pricing.
Two-thirds (66 percent) have adjusted prices to account for some or all tariff costs, KPMG found, with 35 percent absorbing some costs and 31 percent passing on the full amount. Only 39 percent reported no price changes.
On trade negotiations, the survey pointed to broad support for a firm stance: 69 percent agreed Canada should be tough negotiators and use all points of leverage, while 65 percent said Canada should be more transactional and dispassionate in dealing with the US.
"Business leaders want Canada to continue to defend its position at the CUSMA negotiating table and reduce tariff exposure," said Joy Nott, a partner in trade and customs at KPMG.
She said there is also recognition of a fundamental reset in the trade relationship and the risks it carries.
Diversification is underway but limited, the survey suggested.
One-third (33 percent) plan to expand to new markets within one to three years, and 26 percent already export while exploring markets where Canada has a trade deal.
The European Union, United Kingdom and Mexico ranked as the most common non-US markets for increased exports over the past year.
"This is diversification, not decoupling," said Ali Jaffery, a partner and chief economist at KPMG Canada, adding that Canadian firms stay committed to the US market while spreading risk across broader global trade ties.
Regulation emerged as a recurring frustration.
According to the survey, 67 percent said regulatory requirements have created institutional gridlock and 65 percent said over-regulation and higher taxes make it harder to scale and stay in Canada.
Even so, 51 percent agreed that regulatory compliance is an important trade-off to protect health, safety, the environment and the duty to consult with Indigenous Peoples.
Asked to rank priorities, leaders tied removing red tape and fast-tracking a new West Coast oil pipeline at the top (50 percent each), followed by accelerating major project spending such as infrastructure (47 percent) and tax reform (43 percent).
