Most Canadian business leaders fear losing CUSMA protections, KPMG survey finds

As Canada and the United States continue trade talks, a vast majority of Canadian business leaders say losing protections under the Canada-U.S.-Mexico Agreement (CUSMA) would pose the greatest risk to their companies, according to a new survey from KPMG.

Eighty-eight per cent of respondents cited the loss of CUSMA protections as their top concern, while 84 per cent expect to pay some level of U.S. tariffs even if their goods qualify under a future trade pact.

“Although exemptions for CUSMA-compliant goods are providing an escape hatch from many U.S. tariffs, the framework and rules may change under a new trade deal in the future,” said Joy Nott, partner, trade and customs at KPMG. “Historically, a North American free trade zone has allowed all three countries to act against global supply chain threats and work together in a highly competitive world trading environment. However, we could see a situation in which a bilateral agreement with the U.S. replaces CUSMA in 2026 and alters the playing field.”

The annual KPMG federal budget survey of 501 Canadian business leaders found that more than nine in 10 believe a negative outcome in renegotiating the agreement with the U.S. would be the greatest threat to Canada’s economic future.

Four in five leaders said they would support a bilateral agreement with the U.S. only, though Nott noted that a trilateral deal remains preferable.

Other key findings include:

• 93 per cent agree that unpredictable U.S. policies and market access costs are among the top economic issues.
• 80 per cent say Canada’s retaliatory tariffs against the U.S. hurt their business.
• 82 per cent say losing the $800 duty-free exemption on shipments to the U.S. cuts into profits.
• 75 per cent have paused new investments due to trade uncertainty.
• 73 per cent say they can’t afford the costs of exploring new markets.

“The full effect of U.S. tariffs is only beginning to make its way through the economy now,” said Lachlan Wolfers, national leader, KPMG Law. “In the initial phase, affected businesses chose to absorb the tariffs, whereas going forward we are expecting to see more businesses pass on the tariff costs through to end consumers.”

Wolfers added that many firms have taken short-term steps, such as moving product into the U.S. ahead of tariff measures, but few have made long-term shifts like establishing new trade corridors or relocating production.

The KPMG 2025 Federal Budget survey was conducted between Sept. 11 and Oct. 2 among 501 Canadian executives from companies across sectors, using Sago’s Methodify online research platform.

Visit here for the full report.