A new survey from KPMG Canada reveals that 42 per cent of Canadian manufacturing companies have either already shifted production to the United States or are actively planning to do so. The findings, based on a survey of 275 manufacturers conducted in May, highlight a growing trend of strategic rebalancing as businesses navigate persistent trade uncertainty and competitive pressures.
This shift represents a significant departure from previous years, where the primary focus for many firms was immediate survival. According to the report, 57 per cent of manufacturers have paused, reduced, or cancelled capital expenditure projects, while 42 per cent have scaled back research and development spending. More than half of the respondents described their current operational status as being in endurance mode.
While 80 per cent of companies intend to keep their headquarters in Canada, 11 per cent are considering relocating their base to the U.S. within the next five years. Among those currently planning to move production, 77 per cent expect to complete the transition within two years. The survey suggests that these decisions are driven by a desire for tariff relief, access to the U.S. market, and more favorable long-term investment conditions.
Anamika Gadia, partner and national leader of industrial markets at KPMG Canada, noted that while manufacturers have shown resilience, the prolonged uncertainty is now forcing long-term structural changes. She emphasized that businesses cannot remain in a holding pattern indefinitely and are increasingly prioritizing markets where they can secure higher returns and greater stability.
As discussions regarding the future of the Canada-United States-Mexico Agreement continue, the manufacturing sector remains particularly vulnerable. With 86 per cent of surveyed manufacturers operating beyond Canada, the decision to move is increasingly viewed as a necessary step to anchor capital and growth in a more predictable economic environment.