Greater than two thirds of leaders mentioned their enterprise can climate a commerce struggle with the US that lasts greater than a 12 months, though 30% mentioned that tariffs lasting past one 12 months would end in a “important” revenue loss. Simply 3% mentioned a commerce struggle of longer than a 12 months would put them out of enterprise.
“The enterprise group stays unwavering in its dedication to face up for Canada,” mentioned Timothy Prince, the Canadian managing associate for Purchasers and Markets, KPMG in Canada. “The dimensions of the tariffs and the size of time tariffs stay in place will impression their capacity to climate the approaching storm. Already the uncertainty is prompting corporations to look at each aspect of their enterprise to grasp their choices, with three-quarters already endeavor a strategic overview of their operations.”
To handle the impression of tariffs, companies should make changes together with pricing constructions, provide chains, and streamlining whereas looking for new markets, subsidies or tax incentives, and potential exemptions from tariffs.
However sadly, there’ll seemingly be ache for the Canadian labour market with half of respondents indicating that they’re already decreasing manufacturing and/or shedding workers and 28% will begin decreasing headcount and manufacturing four-to-six months right into a tariff struggle. Greater than six in ten could think about shifting some manufacturing to the US to mitigate the impression of tariffs.
“Whereas shifting operations to the US is one option to mitigate tariffs, the economics should be rigorously examined,” says Lachlan Wolfers, nationwide chief of KPMG Legislation in Canada and KPMG’s International Head of Oblique Tax. “There are lots of elements to think about, together with navigating employment and setting rules, constructing new provider and buyer relationships, and managing US and Canadian tax complexities. Relocation tends to be the a lot much less widespread, final response proper now, however these selections ought to at all times be made with a longer-term funding horizon.”