Many Canadian business leaders are supportive of the federal government’s economic agenda, according to the findings of the “National Business and Trade Outlook Survey” published by KPMG.
Fifty-five percent believed that the government was progressing in terms of growing support for Canadian businesses. Fifty-one percent of business leaders and decision-makers reported being confident that the government’s measures would improve their businesses over the next three years.
Forty-seven percent expressed confidence that their organizations could bolster investment in Canada if they received support through “Buy Canadian” procurement, government incentives, and new financing.
“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,” said Lachlan Wolfers, KPMG Law’s national leader, in a statement.
Sixty-seven percent of business leaders indicated that regulatory compliance requirements at all levels of government have spurred what KPMG described as “institutional gridlock,” stalling projects and investments. Thus, half of business leaders indicated that the government needed to prioritize eliminating red tape and speeding up regulatory reform in its efforts to boost the economy.
Another 50 percent said the government needed to construct a new West Coast oil pipeline to strengthen Canada’s position as an energy superpower. Forty-seven percent indicated that major spending on projects like infrastructure should accelerate, while 43 percent said the government should focus on tax reforms like corporate taxes and investment incentives.
Tariff preparation
Wolfers noted that Canadian businesses were “taking a measured approach” and waiting out the US tariff threats situation.
Sixty-six percent of businesses have amended prices in consideration of tariff costs; 31 percent of these accounted for all tariff costs. Sixty-five percent advocated for the federal government to be “transactional and dispassionate” in its US negotiations, having flagged the situation as “the new normal.”
“Business leaders want Canada to continue to defend its position at the CUSMA negotiating table and reduce tariff exposure. 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,” said Joy Nott, trade and customs partner at KPMG.
Many businesses have incorporated Canada’s trade diversification agenda into their adaptation plans, with exports to the European Union, the UK, and Mexico ticking up in the past year. These countries were also regarded as the top destinations for future export growth, KPMG noted.
Twenty-six percent of businesses are either exporting or plan to export to countries with which Canada has inked a trade deal.
“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,” said Ali Jaffery, KPMG Canada’s chief economist.
KPMG obtained feedback for the “National Business and Trade Outlook Survey” from 359 business owners and decision-makers in Canada. The survey period ran from June 25 to July 13.