Canadian business leaders have urged federal and provincial governments to fight tariffs with tariffs in the KPMG in Canada tariffs survey.
“Nine in 10 business leaders across the country want the federal and provincial governments to take immediate steps to eliminate inter-provincial trade barriers, reform the tax system, provide incentives to onshore, and encourage Canadians to 'Buy Canadian' – in short, they want a stronger, more resilient country,” said Benjie Thomas, chief executive officer and senior partner of KPMG Canada, in a statement.
According to KPMG, most leaders “wholeheartedly believe” that Canadian governments must “stand firm in protecting Canada's sovereignty and values.” Eighty-five percent of survey respondents backed retaliatory tariffs as a response to US tariffs; 82 percent supported a “targeted, dollar-for-dollar retaliatory response.”
Eighty-one percent of respondents said they were willing to take the short-term hit from retaliatory tariffs if the country could negotiate a deal that maintained Canada’s “trade-based economy, independence and sovereignty,” according to KPMG. Eighty percent called for the federal government to provide pandemic-level support for Canadians whose employment would be affected, given that 56 percent stated tariffs would drive layoffs.
Eighty percent of business leaders expect a recession this year; 88 percent of survey respondents confirmed that they export or sell to US markets, and 81 percent said US tariffs would affect their business.
For 85 percent of respondents, federal and provincial governments should reduce business taxes and amend the tax system to compete with upcoming US tax reform.
“The new US administration's economic and trade policies are having huge ripple effects in Canada and around the world. There are important steps that Canadian businesses can take to prepare for trade disruption and higher costs and build resiliency,” said Lucy Iacovelli, KPMG Canada’s Canadian managing partner, tax and legal, in a statement. “No matter when or if US tariffs or tax cuts take effect, now is the time to be proactive and understand your exposure and develop mitigation strategies.”
In a pre-emptive move against possible tariffs, 65 percent of respondents shipped goods to the US before Donald Trump’s inauguration as US president on January 20. Forty-eight percent intend to transition their investments to the US and establish operations south of the 49th parallel to limit expenses and cater to the US market.
The KPMG in Canada tariffs survey polled 250 Canadian business leaders from January 21 to January 27.