Canadian businesses face increased fraud, cybersecurity risks amid tariff-driven supply chain shifts: KPMG

Canadian businesses reconfiguring their supply chains in response to new U.S. tariffs must be on high alert for fraud and cybersecurity threats, warns KPMG in Canada.

With 25 per cent tariffs on most products now in effect, a KPMG survey found 44 per cent of businesses are already diverting U.S.-bound exports through third-party countries, while another 44 per cent are considering it.

Myriam Duguay, the firm’s national forensic leader, cautions that hasty supplier changes can expose businesses to fraud.

“With U.S. tariffs now in place for Canadian exporters, many businesses might rush to switch suppliers, and in doing so, they might not do the rigorous due diligence that’s needed to reduce third-party risks,” she said.

KPMG’s cybersecurity leader, Hartaj Nijjar, says new suppliers could also create vulnerabilities.

“If the new suppliers do not have robust cybersecurity measures in place, they could become a weak link in an organization’s supply chain, potentially leading to data breaches,” he said.

To mitigate risks, KPMG recommends thorough supplier due diligence, reviewing contracts for hidden clauses, strengthening internal controls and implementing cybersecurity measures to prevent payment fraud and deepfake scams.

“While changing suppliers and reconfiguring supply chains can help businesses mitigate the added cost of tariffs, they need to be aware of the associated fraud and cybersecurity risks,” Duguay said.