A new KPMG survey reveals that many Canadian manufacturers are contemplating relocating to the United States as ongoing trade tensions take a toll on their businesses. The survey, released on July 7, 2026, indicates that nearly one-third of Canadian manufacturers are actively considering moving some or all of their operations south of the border.
Key findings from the KPMG survey
The survey, which polled 500 Canadian manufacturers, found that 30% are exploring a move to the U.S. in response to trade uncertainties. Among those considering relocation, 60% cited tariffs as the primary driver, while 45% pointed to supply chain disruptions and 35% mentioned regulatory burdens.
“The trade landscape has become increasingly challenging for Canadian manufacturers,” said Mary Anderson, KPMG’s national manufacturing leader. “Many are looking to the U.S. as a more stable environment for their operations.” The survey also revealed that 25% of manufacturers have already taken steps toward a move, such as scouting locations or consulting with U.S. economic development agencies.
Impact on Canadian economy
The potential exodus of manufacturers could have significant consequences for Canada’s economy. The sector employs over 1.7 million Canadians and contributes approximately 10% to the country’s GDP. A loss of manufacturing operations could lead to job cuts and reduced investment in local communities.
“If we see a wave of manufacturers leaving, it will be devastating for Canadian workers and the broader economy,” said John Smith, an economist at the University of Toronto. He noted that the trend could also weaken Canada’s bargaining position in future trade negotiations.
According to the survey, the sectors most likely to move include automotive parts (40%), machinery (35%), and food processing (25%). These industries are particularly sensitive to tariff changes and cross-border supply chain issues.
Government response
In response to the survey, federal officials emphasized their commitment to supporting Canadian manufacturers. “Our government is working to create a competitive environment for businesses,” said a spokesperson for the Minister of Innovation, Science and Industry. “We are investing in innovation and trade diversification to help manufacturers thrive.”
However, critics argue that more concrete action is needed. “The government needs to address the root causes of trade tensions and provide incentives for manufacturers to stay in Canada,” said Sarah Brown, a trade policy analyst at the Canadian Chamber of Commerce.
The survey comes amid ongoing trade disputes between Canada and the U.S., including tariffs on steel and aluminum and renegotiations of the USMCA. KPMG’s findings highlight the growing pressure on Canadian manufacturers to adapt to a volatile trade environment.
