Nearly Half of Canadian Manufacturers Moving Production to the U.S.
The 2026 KPMG Canada manufacturing poll found that 42% of firms have shifted or are planning to shift production to the U.S., with 29% having already done so with some or all of their output. Another 13% are planning to move, and 77% of those anticipate doing so within two years under the current operating environment.
Capital Investments on Hold
The survey also revealed that 57% of firms have paused, reduced, or cancelled capital investment projects, while 42% are doing the same with research and development. This hesitation reflects growing uncertainty over trade policies between Canada and the U.S.
Anamika Gadia, KPMG Canada partner and national leader of industrial markets, stated: “While most manufacturers are staying, many are reassessing where future investment, growth and production will occur. The decisions made today will shape Canada’s manufacturing sector for years to come.”
Large Firms Leading the Shift
Of the businesses moving or preparing to move, 49% have annual gross revenue over $300 million, with 38% having already moved in full or part. Among companies with revenue under $300 million, 34% have moved or plan to, but only 20% have taken action. KPMG noted: “Larger, more globally integrated firms are responding earlier and at greater scale, while smaller firms remain earlier in the cycle.”
Reasons for Moving South
One-third (32%) of respondents reported higher margins when producing and selling within the U.S. than exporting from Canada, and 35% cited stronger margins on international sales from the U.S. Other factors include lower operating costs in some states, a more favorable tax environment, and easier supply chains if customers are already in the U.S.
When asked what would make them stay, the 275 company owners, executives, and decision-makers polled cited certainty around free trade, continued tariff relief, lower corporate taxes, cheaper energy, better access to skilled workers, and lower housing costs for workers.
