While most manufacturers (80 per cent) are planning to keep their headquarters in Canada, 11 per cent plan to move their headquarters to the U.S. within the next five years. According to Ms. Gadia, while that percentage may appear small, manufacturing represents more than 10 per cent of Canada’s total GDP, so the loss, even of that size, could have a meaningful impact on the economy.
“The greater risk isn’t where companies are today, but where future investment decisions are being made,” says Ms. Gadia. “Many manufacturers are pausing Canadian investments and reassessing where future growth and production capacity should be located.”
The survey finds manufacturers remain heavily dependent on the U.S. market, with 61 per cent agreeing their business cannot survive without access to it. Eighty-six per cent of manufacturers export goods outside Canada, and among exporters, 96 per cent say their products are CUSMA-compliant, meaning they are not subject to tariffs.
“While tariffs are an obvious factor, Canadian manufacturers are making long-term decisions about where to locate based on a broader assessment of where they are most likely to have a competitive advantage,” says Joy Nott, Partner, Trade and Customs at KPMG Canada.
“The June 3, 2026 White House Executive Order on Strengthening Customs Enforcement creates another reason for companies to consider relocating production to the U.S. Under the Order, foreign-headquartered companies, including Canadian businesses, would need to maintain a minimum level of tangible U.S. assets to import goods under their own name. Otherwise, Canadian exporters may have to depend on U.S. customers to act as importer of record, potentially straining key commercial relationships.”
Among companies that have moved some or all operations to the U.S., the top reasons for moving according to respondents are: avoiding or reducing high import tariffs, ongoing trade uncertainty, lower operating costs, a more favourable tax environment, and the ability to better integrate and optimize supply chains.
When asked, those planning to move some or all operations to the U.S., what would encourage them to remain and grow their company in Canada, respondents cited:
Ensuring certainty around free tradeContinuing tariff relief and remissions for imports from the U.S.Lowering corporate taxesImproving cost of living and housing affordability for employeesProviding access to cheaper energyImproving access to skilled workers