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# Business backs Ottawa on trade, but mid-sized firms are paying for it
- URL: https://www.borealian.ca/kpmg-federal-budget-survey-business-owners/
- Published: 2026-10-16T14:39:29.000Z
- Updated: 2026-10-16T14:39:29.000Z
- Description: Business leaders back Ottawa's hard line on trade, KPMG finds, and are willing to pay the price for it. Mid-sized firms are hurting most, as we await the federal budget date.
- Author: Beaverbrook
- Tags: Business & Markets, Trade

Three in four large Canadian companies say they are adapting well to the trade war. Among firms under $100 million in revenue, barely half say the same.

[KPMG’s annual Federal Budget Survey](https://www.newswire.ca/news-releases/businesses-want-federal-budget-2026-to-help-them-compete-from-a-position-of-strength-kpmg-poll-804141313.html?ref=borealian.ca), released Oct. 15, polled 346 owners and decision-makers at firms with at least $10 million in annual revenue through the Angus Reid Forum, an online panel, between Sept. 22 and Oct. 2\. The mood is sturdy. Seventy-one per cent expect a business-friendly budget, and 67 per cent are confident in Canada’s growth prospects over the next three years.

Seventy-two per cent told KPMG that Canada should hold out for a better U.S. trade deal even if that creates some economic pain, and 77 per cent said Ottawa was right to suspend talks and impose counter-tariffs. Yet nearly seven in 10 say U.S. tariffs are forcing them to pass significantly higher costs to customers. Robert Glasgow, a trade partner at KPMG Law, called that combination “striking,” and he is right. We seem to be seeing businesses willing to absorb the costs of their government's negotiating tactics.

Some may argue that this backing settles the matter in Ottawa’s favour. Mark Carney suspended negotiations on Aug. 21, [saying](https://www.pm.gc.ca/en/news/statements/2026/08/21/statement-prime-minister-carney-canada-us-trade-negotiations?ref=borealian.ca) the government’s goal was “never a deal at any price or on any deadline,” and Finance Minister François-Philippe Champagne followed on Aug. 25 with [counter-tariffs](https://www.canada.ca/en/department-finance/news/2026/08/canada-announces-targeted-countermeasures-and-substantive-support-for-workers-and-businesses-in-response-to-us-tariffs.html?ref=borealian.ca) of 15, 25, and 50 per cent on $27.6 billion of U.S. imports. Business, by KPMG’s count, agrees with that call. But support for a strategy is not a verdict on its execution, and the same survey shows where the execution hurts.

Fifty-five per cent of leaders told KPMG that Canada’s own counter-tariffs are creating significant challenges for their businesses. That share rises to 64 per cent in agriculture, automotive, construction, and manufacturing, and to 67 per cent in retail and wholesale. Those are the firms that buy American inputs and sell to Canadian customers, and Ottawa has raised their costs in the name of defending them. Employment fell by 68,000 in September, mostly among young workers, according to Statistics Canada’s [Labour Force Survey](https://www150.statcan.gc.ca/n1/daily-quotidien/261009/dq261009a-eng.htm?ref=borealian.ca).

The size gap shows up in budget expectations too. KPMG found that 82 per cent of companies earning $1 billion or more are confident the budget will support growth, against 54 per cent of firms between $10 million and $100 million. Large companies have treasury teams and alternative suppliers. Mid-sized owners, such as family manufacturers and regional distributors, have thinner margins and fewer options when a duty lands on a part they cannot source elsewhere.

What these owners want is clear. Forty-four per cent named attracting foreign investment and keeping capital in Canada as a budget priority, 34 per cent named faster major projects, and 87 per cent support making the economy more self-reliant and diversified. Sixty-eight per cent think new trade deals with non-U.S. partners will help their business, rising to 80 per cent among technology firms.

The government has made some moves. In September it announced a “productivity mega deduction,” which makes permanent an immediate-expensing measure from the 2025 budget, at an estimated cost The Globe and Mail put at $36 billion over five years. The Canada Revenue Agency also began fast-tracking advance tax rulings for investments of $1 billion or more. Both help, but the second one helps the exact giants who already feel fine.

The larger promise is still waiting. The Liberals’ 2025 platform pledged an “expert review of the corporate tax system,” and 87 per cent of KPMG’s respondents want that comprehensive review now. Asked about the pledge in June, Champagne [told The Globe](https://www.theglobeandmail.com/politics/article-business-leaders-support-tax-reform-2026-budget-kpmg-survey-finds/?ref=borealian.ca), “I know what the issues are. I’m a man of action.” His spokesperson, John Fragos, said on Oct. 14 that the government will “advance measures that better advance Canada’s tax competitiveness.” Lachlan Wolfers, KPMG Law’s national leader, answered the point in advance: targeted incentives “are no substitute for comprehensive tax reform.” Whether that review ever starts is a test of how much Ottawa really cares about this issue.

Ottawa has also left business without a calendar. As of Oct. 16, Champagne had not announced a date for the 2026 budget, even as he asks firms to carry counter-tariff costs. An owner deciding whether to hire in January, or to commit capital to a new plant, cannot plan around a budget with no date. Wolfers [told BNN Bloomberg](https://www.bnnbloomberg.ca/business/economics/2026/10/15/why-business-leaders-are-cautiously-optimistic-about-the-upcoming-federal-budget/?ref=borealian.ca) that “we’re starting to see the tariffs really bite,” and the bite is sharpest for the firms with the least room to wait.

The cheerful news is that Canadian business has kept its nerve: 59 per cent of respondents are optimistic about the economy over the next 12 months, goodwill Ottawa should spend on growth while it lasts.

When Champagne finally names a budget date, the budget he tables should give mid-sized owners in manufacturing and retail relief from counter-tariff costs, and a start date for the tax review his party promised in 2025\. If it delivers only more measures sized for billion-dollar firms, the 51 per cent of smaller companies that are coping will start to shrink.