One year after manufacturers warned that U.S. tariffs posed an existential threat to their businesses, a new KPMG survey finds four in 10 manufacturers have moved production to the U.S. or are considering doing so as they adapt to ongoing trade uncertainty and mounting competitive pressures. The survey of 275 manufacturers finds that 57 per cent say they have paused, reduced or cancelled capital expenditure projects due to economic uncertainty and trade and tariff threats, while 42 per cent have scaled back or paused research and development spending. More than half (52 per cent) say they are currently operating in “endurance mode.” The findings come as discussions surrounding the Canada-United States-Mexico Agreement (CUSMA) intensify. Government action on overall competitiveness, taxation, regulations and trade will play a critical role in determining whether future manufacturing investment stays in Canada, says Anamika Gadia, Partner and National Leader of Industrial Markets at KPMG Canada. The survey suggests manufacturers are not abandoning Canada, but many are becoming increasingly cautious about placing future investment in Canada.

Additional coverage in the Globe and Mail by Daniel Johnson: More than 40% of Canadian manufacturers weighing move to U.S., KPMG poll finds