Businesses see promise, want action on economic plan

Canadian business leaders see opportunity in the federal government's economic agenda but say commitments must quickly translate into action, as they navigate ongoing trade uncertainty, finds a new KPMG survey.

The National Business and Trade Outlook survey of 359 business leaders and decision-makers found just over half (51 per cent) expect the federal government's economic measures will leave their business 'much better off' or 'somewhat better off' over the next three years. More than half (55 per cent) believe the government is making progress in strengthening support for Canadian businesses, suggesting an overall approach that is viewed as directionally positive. However, optimism is tempered by a desire for faster execution.

"As the U.S. ratchets up trade pressure on Canada, many Canadian businesses are taking a measured approach and want to wait to see how the latest U.S. tariffs will shake out before reacting," says Lachlan Wolfers, National Leader, KPMG Law. "Our survey shows business leaders want governments to stay focused on the actions that are within Canada's control to build economic resilience. They want government to work with them to quickly deliver on the federal economic agenda, improve tax competitiveness, reduce red tape and diversify trade."

Although the survey was conducted shortly before the latest U.S. threat to impose a 50 per cent tariff on certain Canadian exports and the announcement of a new 10 per cent 'forced labour' tariff, the findings provide insights into how business leaders are feeling during a period of ongoing trade volatility.

When asked to rank what measures business leaders wanted to see from governments, they identified removing red tape and accelerating regulatory reform, fast-tracking a new west coast oil pipeline, accelerating major infrastructure projects and tax reform as the key actions needed to strengthen the economy.  

Key survey findings

• 51 per cent expect their business to be better off as a result of the federal government's economic measures over the next three years
  • 14 per cent expect to be 'much better off', 36 per cent 'somewhat better off'; 31 per cent say 'no material impact', with 15 per cent 'somewhat worse off' or 'worse off'
• 66 per cent have adjusted prices to account for some or all tariff costs
  • 35 per cent have adjusted for some (but not all) tariff costs; 31 per cent have accounted for full tariff costs
• 65 per cent agree Canada should be more transactional and dispassionate when negotiating with the U.S., as this is the new normal
• 67 per cent agree that regulatory compliance requirements at all levels of government, (e.g., red tape, consensus-based decision-making), have created institutional gridlock, delaying projects and deterring investment.

A strong but transactional negotiating stance on CUSMA

As CUSMA negotiations intensify, the survey shows broad support for a strong Canadian stance. Nearly seven in ten (69 per cent) agree Canada should be tough negotiators and use all points of leverage. Most see trade tensions continuing to shape their operating environment for the foreseeable future.

"Business leaders want Canada to continue to defend its position at the CUSMA negotiating table and reduce tariff exposure," says Joy Nott, Partner, Trade and Customs. "At the same time, there is a recognition of a fundamental reset in the trade relationship and the risks that entails. Nearly two thirds agree that Canada should approach negotiations with greater pragmatism, consistent with a more transactional Canada-U.S. relationship." 

Diversification is real, but the U.S. is still the top market

Canada's trade diversification agenda is reflected in business adaptation plans, but the gravitational pull of the U.S. remains strong. When asked whether Canada's push to diversify trade, forge new trade agreements, and increase services to exporters is impacting their company's trade horizons, one-third (33 per cent) say they plan to expand to new markets within the next one to three years. Twenty-six per cent already export and are exploring exporting to markets where Canada has a trade deal.

"Our survey indicates Canadian businesses are taking trade diversification seriously, and official data indicate that shift is already underway, driven by demand for commodities. The U.S. still accounts for the bulk of trade in both goods and services, but it's not a surprise that more exporters plan to pursue other markets. This is diversification, not decoupling. Canadian businesses remain committed to the U.S. market while building resilience and reducing risk through broader global trade relationships," says Ali Jaffery, Partner and Chief Economist, KPMG Canada.

The European Union, United Kingdom and Mexico were the most common non-U.S. markets where businesses reported increased exports over the past year, and these jurisdictions were also identified as the leading destinations for future export growth.

Businesses adapt by modifying pricing

Tariff pressures are influencing both customer-facing pricing and internal cost management decisions. Only 39 per cent report no price changes as a result of tariff-related pressures. By contrast, two-thirds (66 per cent) have adjusted prices to account for some or all tariff costs.

Red tape and regulation clear pain points

More than two thirds (67 per cent) say regulatory requirements have created institutional gridlock; about two-thirds (65 per cent) say over-regulation and higher taxes make it harder for businesses to scale and remain in Canada.

This does not suggest that businesses reject regulation outright. Just over half (51 per cent) agree that regulatory compliance is an important trade-off to protect health, safety, the environment and the duty to consult with Indigenous Peoples. "Businesses accept the need for appropriate safeguards, but want faster, more predictable processes that accelerate project delivery and enable investment and scaling decisions," says Mr. Wolfers.

About KPMG's National Business Outlook and Trade Survey

The online survey was conducted June 25 to July 13, 2026, among 359 business owners and decision-makers at businesses in Canada with annual gross revenue greater than $10M CAD. Respondents were recruited from the Angus Reid Forum and included business owners and senior decision-makers in executive roles. The annual revenue breakdown is as follows: $10 million to $99 million (24%); $100 million to $299.9 million (11%); $300 million to $499.9 million (8%); $500 million to $1 billion (21%); $1 billion to $10 billion (22%); $10 billion to $20 billion (4%); Over $20 billion (11%).  Nearly three quarters (72 per cent) of respondents identify as exporters; 79 per cent say their goods and services are compliant under CUSMA. (*In instances where respondents were allowed to select multiple responses, percentages may not add up to 100 per cent).