Canadian business leaders are sending Ottawa a surprising message: securing a better trade agreement with the United States may be worth enduring additional economic hardship.
A new KPMG survey released October 15, 2026, found that 72% of surveyed Canadian business leaders believe the federal government should hold out for more favourable trade terms, even if doing so creates some economic pain. The finding comes despite widespread concerns about tariffs, rising costs and the financial strain already affecting businesses.
The results reveal a complicated economic calculation. Many executives support Prime Minister Mark Carney’s tougher negotiating position while acknowledging that Canada’s trade dispute with Washington is hurting their operations.
For Ottawa, the message extends beyond the negotiating table. Business leaders also want stronger domestic competitiveness, diversified export markets and federal budget measures that help Canadian companies withstand prolonged uncertainty.
Business Leaders Are Willing to Accept Economic Pain for Better Terms
KPMG’s findings reveal a divide between immediate financial pressures and the kind of agreement executives want Canada to secure. Seventy-two per cent of respondents supported holding out for better U.S. trade terms, even if doing so brought some economic pain. Another 77% endorsed Ottawa’s decision to suspend negotiations and impose counter-tariffs. Those results suggest considerable backing for a firm negotiating position, although agreeing with the strategy does not mean welcoming weaker sales, layoffs or an open-ended dispute.
There is no universal agreement on when the government should restart talks. Forty-five per cent said Canada should return only when a better deal was achievable, while 23% favoured an immediate return without preconditions. KPMG’s published summary did not classify everyone else under either option. This distinction matters for a business owner balancing next month’s payroll against the potential value of a more predictable agreement years from now. Supporting Ottawa’s negotiating leverage and worrying about its cost are entirely compatible views.
The Survey Reflects Hundreds of Business Decision-Makers
KPMG surveyed 346 Canadian business owners and decision-makers between September 22 and October 2, releasing the results on October 15. Respondents belonged to the Angus Reid Forum. The sample leaned heavily toward larger businesses: 21% represented companies with annual revenue of at least $1 billion, and another 34% represented firms earning between $500 million and $1 billion. Only 19% came from the $10 million-to-under-$100 million bracket. No disclosed revenue category covered businesses earning less than $10 million annually.
The geographic and ownership breakdowns matter as well. Almost half the respondents, 48%, were headquartered in Ontario, followed by British Columbia at 16% and Quebec at 15%. Fifty-seven per cent represented privately held firms, 24% private-equity-owned businesses and 17% publicly traded companies. These answers offer a useful window into decisions at substantial Canadian firms, not an established measure of every employer’s, worker’s or voter’s opinion. A neighbourhood store or a small contracting business may face a very different calculation from a corporation with international suppliers.
Carney’s Decision to Suspend Trade Talks Still Has Strong Support
The survey followed a decisive breakdown in diplomacy. On August 21, Prime Minister Mark Carney suspended formal Canada-U.S. trade negotiations after saying last-minute American proposals were economically unacceptable. The United States proceeded with 50% duties on a specified group of Canadian goods worth approximately $27.6 billion, effective August 22. Canada responded with new counter-tariffs on selected American imports beginning September 8, using rates of 15%, 25% and 50%, depending on the product.
These measures did not place a 50% tariff on every shipment crossing the border. Nor did the suspension end the existing Canada-United States-Mexico Agreement. The three governments participated in its scheduled July joint review; Washington declined to extend the treaty in its existing form, but the agreement remained in force. Against that backdrop, KPMG’s finding that 77% approved suspending talks and imposing counter-tariffs reflects support for a particular response to American demands, not a vote to abandon North American trade altogether.
More Than Half Say Canada’s Counter-Tariffs Are Hurting Their Businesses
The toughest contradiction in the results is how many executives support retaliation while reporting damage from it. Fifty-five per cent said Canadian counter-tariffs were creating significant challenges for their business. That share rose to 67% among retail and wholesale companies and 64% in the combined agriculture, automotive, construction and manufacturing group. KPMG also reported that nearly seven in ten leaders were passing significantly higher costs associated with U.S. tariffs on to customers and clients.
The pressures are easy to picture. A distributor buying American equipment may face a higher landed price and then must decide whether to increase prices, accept a smaller margin or change suppliers. A manufacturer selling south of the border could confront a different problem: an American buyer unwilling to absorb the additional cost. These are illustrations, not documented individual cases from the survey, and counter-tariffs do not affect every product equally. But they explain why a business leader can favour standing firm in principle while asking Ottawa for help with immediate expenses.
Smaller Companies Are Finding It Harder to Adapt
Companies do not enter a trade standoff with equal resources. Overall, 66% of KPMG respondents said their organizations were adapting successfully to higher trade barriers and geopolitical risks. Among companies with annual revenue below $100 million, only 51% reported successful adaptation. The figure reached 77% among firms bringing in at least $1 billion. Larger operations may have more options to renegotiate contracts, shift sourcing or spread costs across markets, although none of those adjustments is automatic or free.
The same difference appeared in expectations for the federal budget. Just 54% of respondents in the $10 million-to-under-$100 million group believed the budget would support company growth, compared with 82% at firms earning $1 billion or more. A medium-sized parts supplier with one dominant American customer cannot necessarily diversify as quickly as a multinational. The contrast limits what the 72% headline can tell policymakers: patience is easier to advocate when a company can finance a prolonged period of uncertainty.
Canada’s Dependence on U.S. Trade Makes the Stakes Enormous
The United States remains a market Canada cannot simply replace. Statistics Canada found that 71.7% of Canadian merchandise exports went to American buyers in 2025, down from 75.9% in 2024. That shift illustrates diversification but also the continuing scale of cross-border dependence. For factories, farmers and transportation companies, access to nearby American buyers often determines whether production volumes are large enough to support jobs and new investment.
The damage is uneven. The Bank of Canada reported in April 2026 that steel exports to the United States had fallen by approximately half under steep trade restrictions, while other industries had adjusted more successfully. Meanwhile, Statistics Canada reported a nationwide employment decline of 68,000 in September and an unemployment rate of 6.5%. The labour figures cannot be attributed solely to tariffs; the largest monthly job losses were not concentrated in trade-exposed manufacturing. Nevertheless, they underline why promises of long-term bargaining gains need to be weighed against households experiencing weaker employment prospects today.
Canadian Companies Increasingly Want Alternatives to America
Looking for customers beyond the United States has become part of corporate strategy rather than a distant ambition. In KPMG’s survey, 76% said diversification mattered more than it had six months earlier, while 84% backed closer ties with the European Union and other stable partners. Sixty-eight per cent were optimistic that agreements with non-U.S. markets would improve their businesses’ prospects. The technology sector was especially positive, with 80% expecting benefits from new international partnerships.
Evidence of movement exists, though geography makes a complete pivot difficult. Statistics Canada recorded a 17.2% increase in merchandise exports to non-U.S. destinations during 2025. And on October 13, Carney and Indian Prime Minister Narendra Modi reaffirmed plans to conclude a comprehensive trade agreement; no completed deal was announced. New agreements could lower barriers, but companies still need distribution networks, approvals and buyers. Selling additional services to Europe may be feasible sooner than redirecting a factory built to supply a plant a short drive across the American border.
The Upcoming Federal Budget Is Becoming Another Major Test
The survey also turns attention from Washington to Ottawa’s forthcoming fall budget. Seventy-one per cent of respondents expected business-friendly measures that would improve their companies’ growth prospects. When asked what the budget should address, 62% identified the Canada-U.S. trade dispute and tariff impacts. Forty-four per cent cited the need to attract investment and keep capital in Canada, while 34% pointed to major projects and another 34% to costs facing businesses and households.
The Department of Finance finished its pre-budget consultations in September after visits to 23 cities, 44 roundtables and 56 bilateral meetings, along with more than 18,000 online survey responses. Those discussions raised themes similar to KPMG’s findings: protecting jobs, reducing business friction and helping companies find new opportunities. A budget can offer targeted support or improve conditions for investment, but it cannot dictate American tariff policy. For an exporter deciding whether to upgrade machinery, the credibility and speed of domestic measures could be nearly as important as the next diplomatic announcement.
Most Leaders Now Put Canadian Competitiveness Ahead of a Trade Deal
Business leaders were unusually consistent about domestic competitiveness. Seventy-three per cent of KPMG respondents said making Canada more competitive was more important right now than securing a U.S. trade deal. Eighty-seven per cent wanted a comprehensive federal tax review, 85% called for a simpler system, and 82% believed Canadian tax rules needed to become more competitive. These are opinions about policy priorities, not evidence that any particular tax cut would automatically produce jobs or growth.
There is a deeper economic concern behind those responses. Bank of Canada staff estimated in May that potential-output growth would slow from 2.3% in 2025 to 1.2% in 2026, citing weaker population growth, U.S. tariffs and trade uncertainty. Potential output is the economy’s estimated sustainable capacity, not actual GDP growth. Better investment incentives, infrastructure and fewer administrative barriers may help that capacity over time, but they cannot instantly compensate a company for losing a major customer. Ottawa faces a two-track challenge: manage today’s trade shock without neglecting productivity.
The Next CUSMA Review Could Determine How Long Businesses Must Wait
The negotiating calendar offers no immediate guarantee of relief. During the July 1 joint review of CUSMA, the United States declined to extend the agreement in its current form, although it remains in force. Washington opened public consultations for the 2027 review, with submissions due January 12. U.S. Trade Representative Jamieson Greer said on October 8 that officials were still communicating frequently with Canadian counterparts, despite the suspension of formal negotiations, and that Washington was maintaining its position.
KPMG’s findings therefore measure business patience at a moment when the next agreement is uncertain. Fifty-nine per cent were optimistic about Canada’s economy over the next 12 months, rising to 67% when asked about the coming three years. That cautious confidence should not obscure the respondents struggling with tariffs today. A stronger deal could give businesses lasting predictability; a drawn-out confrontation could further discourage orders, hiring and investment. The central question for Ottawa is not simply whether to wait, but how to protect the companies and workers expected to endure that wait.
