TORONTO – The vast majority of Canadian business leaders want a targeted, dollar-for-dollar retaliatory response if the United States delivers on its tariff threats this week, a new KPMG in Canada survey found.
The survey, which polled 250 Canadian business leaders, found eight in 10 are bracing for a recession but are still prepared to endure “short-term pain” to negotiate a fair deal that protects Canadian interests.
“One of the most important themes coming out of our survey is that business leaders in this country want Canada to stand firm, fight back and be united,” said Joy Nott, a partner in the trade and customs practice at KPMG in Canada.
Six in 10 businesses said they could withstand a prolonged trade war, the report said.
The survey comes as federal and provincial governments prepare for a trade war with the U.S., which could come as early as Saturday.
U.S. President Donald Trump’s press secretary Karoline Leavitt confirmed on Tuesday the plan to introduce tariffs on Canadian goods was “still on the books” for Feb. 1.
Ninety-four per cent of respondents said Canada and the 13 premiers must show a united front against the U.S.
However, in reality, the premiers have publicly disagreed on how to deal with potential tariffs, including on the issue of curtailing energy exports to the U.S. and the scope of the potential retaliation.
Six in 10 respondents say Canada should halt oil exports south of the border, though the opinions diverged depending on the province.
As the country braces for a trade war, businesses have some ideas on how to mitigate the impact of tariffs. The report found nine out of 10 businesses said they want interprovincial barriers to come down, while others want governments to encourage domestic production and urge consumers to “Buy Canadian.”
Businesses are also asking Ottawa to create a competitive environment compared with the United States, the poll shows.
That means a positive income tax structure, breaking down provincial trade barriers and making the country an attractive place for onshoring, Nott said.
“If we were to smooth out those bumps, then we’d be prepared in a more unified way to compete on the global stage with the United States and other countries as well,” she added.
Nott warned businesses to not wait for U.S. tariffs to be implemented — instead, they should be running assessments to understand what the impact of tariffs could be, which could inform their next steps.
“It’s really a question of running a whole bunch of what-if scenarios, mapping the supply chain, mapping the sales structure … because there is such a high level of uncertainty right now,” she said.
Nott said most companies are definitely in planning mode.
“About two-thirds said they have taken pre-emptive action by shipping product to the U.S. before the president’s inauguration,” she said.
This report by The Canadian Press was first published Jan. 29, 2025.
