Some Canadian companies are considering a move to the United States as a strategy to evade tariffs and protect the future of their businesses, a new survey suggests.
Nineteen percent of the 283 Canadian companies that participated in the survey indicated they would consider relocating part or all of their production to the United States to safeguard the sustainability of their operations, the survey from PricewaterhouseCoopers LLP Canada found.
Many of the businesses considering a move south of the border were from the industrial and automotive industries.
“While a lower percentage—19 percent—are looking at moving production to the United States, this is still a fairly significant number that does raise concerns for the Canadian economy,” the report said. “It’s also notable that the percentage considering this action rises to 37 percent among respondents in the industrial manufacturing and automotive industries.”
U.S. President Donald Trump has already imposed 25 percent tariffs on imports from Canada that do not fall under the free trade deal established between the United States, Canada, and Mexico, along with a 10 percent tariff on energy. The president has also slapped a 25 percent tariff on steel and aluminum imports, including on those from Canada, and is considering tariffs on Canadian lumber. More tariffs are expected to come into force in April after U.S. officials finish their review of existing trade agreements.
The survey found 78 percent of respondents say their businesses are at least somewhat affected by the tariffs, with 31 percent reporting a major impact. Those impacts include the inability to effectively plan in the face of market uncertainty and increased costs of inputs, and supply chain challenges.
Nearly 70 percent of respondents said they have already experienced increased costs and disruptions to their supply chains, 41 percent reported a decline in competitiveness and demand, and approximately 25 percent said they had experienced a loss of market share in the United States.
“The critical question is what companies will do to stay viable for the long term, an issue that’s relevant not just in the context of trade uncertainty but also given the overall need to boost Canada’s productivity and competitiveness,” the report said.
The poll found that 55 percent planned to expand to new markets and 30 percent said they would pursue mergers and acquisitions or partnerships with other organizations.
Business owners are also less optimistic about their futures than they were last fall, the poll found. Fifty-eight percent of respondents expressed confidence in the viability of their business a decade from now, a decrease from the 63 percent reported in November 2024.
Fifteen percent of respondents said their businesses would only be able to survive for the next two years, and 3 percent said they would need to close after one year.
