A new survey has found that Canadian businesses are optimistic that Ottawa’s promised regulatory changes and infrastructure investments will shore up the economy amid disruptions caused by the U.S.-initiated trade war.
KPMG’s poll of major players in the country’s economy showed broad support for the Carney government’s agenda, including streamlining approval processes and construction of a new West Coast oil pipeline.
The tax advisory firm contracted Angus Reid to gauge the opinions of 359 leaders or decision-makers at businesses in Canada with annual gross revenue greater than $10 million. Nearly 60 per cent of the respondents worked for companies reporting revenue of $500 million or more.
Fifty-one per cent said they expect the federal government’s economic measures will leave their businesses ‘much better off’ or ‘somewhat better off’ over the next three years, while 55 per cent said they believe the government is making progress in strengthening support for Canadian businesses.
There’s still concerns around existing policies. Sixty-seven per cent blamed regulatory requirements for delaying projects and deterring investment, while 65 per cent said these factors and taxes make it harder to scale up or remain in Canada.
Still, nearly half (47 per cent) said they were confident in their firm’s ability to increase investment in Canada if supported with the feds’ ‘Buy Canada’ procurement policies, other incentives and new financing.
“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,” Lachlan Wolfers, national leader of KPMG Law, said in a statement.
“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.”
Prime Minister Mark Carney’s broader economic agenda seemed to have the backing of business leaders.
The national business and trade outlook survey asked respondents to rank what they believe should be the priorities for Ottawa, with regulatory reform and construction of a new West Coast pipeline topping the list at 50 per cent each. Accelerating major project spending including on infrastructure (47 per cent) and tax reform (43) were close behind.
Carney is moving ahead with designating the proposed pipeline as a project of national importance, laying the path for a streamlined approval processes. The Liberal government has also outlined plans to spend billions to support trade-enabling infrastructure as well as offer new financing and tax changes to incentivize investment.
BACKGROUND: Pipeline set to become first project fast-tracked under Building Canada Act
Many of the business leaders said they have had to raise prices to adjust to U.S. tariffs (66 per cent), but there was broad support for Canada to avoid making further concessions to the Americans.
Sixty-five per cent said they agreed that Canada should be more transactional and dispassionate when negotiating with the U.S., while 69 per cent supported being tough negotiators and using all points of leverage.
The survey was conducted between June 25 and July 13, failing to capture the latest tariff threat from south of the border. U.S. President Donald announced on July 20 that he was imposing 50 per cent tariffs on a swath of Canadian goods in 30 days’ time.
Carney has sought to soften the blow of American tariffs by prioritizing new trading relationships abroad, setting a target of doubling non-U.S. exports by 2035.
Many business leaders supported the government’s broader push to diversify trade away from the U.S.
One-third said they plan to expand to new markets within the next one to three years, while 26 per cent said they already export or are exploring exporting to markets where Canada has a trade deal.
