A recent survey published by KPMG in July found that four in ten Canadian manufacturers have either made the decision to relocate or are in the process of considering it, as the tariff environment is making it difficult to remain in operation with the status quo.
In order to keep businesses alive, many Canadian manufacturers have had to open a plant south of the border, particularly small and medium sized businesses that are less equipped to deal with the ongoing trade battle.
Anamika Gadia, an industrial manufacturing expert for KPMG, said the trade climate is forcing many companies’ hands. “One would expect that the ongoing trade uncertainty and the announcement of new tariffs may increase the pace at which companies make these decisions,” Gadia said. “One thing that’s important to note from our survey is the sentiment around moving to the U.S.: While trade and tariffs are certainly a huge, significant driver of the trend, it’s not the sole driver of the trend,” she added, also noting that corporate tax rates are another impediment.
While some operations have moved outright, others are seeking to establish relationships with existing manufacturers in the U.S. to support customers on both sides of the border. This will ensure that jobs are protected in Canada while ensuring U.S. business is not lost entirely.
