Despite a challenging economic climate, Canadian business leaders remain bullish on investment, even outpacing their U.S. and global peers in some areas. But that optimism is tempered by a warning: Without urgent policy action, Canada risks falling behind where it matters most, productivity-enhancing technology.
A new KPMG survey finds that three-quarters of Canadian executives say their companies are investing at least as much as international competitors. Yet six in 10 say today’s economic environment is limiting their ability to invest in the kinds of technologies that would boost efficiency and long-term growth.
"These results reflect a more ambitious mindset within Canadian business, but they also acutely underscore the difficulties our economy faces right now," Benjie Thomas, KPMG Canada CEO and senior partner, said in a statement.
"Tech investment requires a strong bottom line," Thomas added, "and nine in 10 business leaders say it is essential that governments ‘act with urgency’ and not fall ‘prey to complacency’ in driving tax reform, eliminating interprovincial trade barriers, improving access to capital, and building infrastructure that unites us and opens new markets."
Government action seen as critical to unlocking productivity gains
Business leaders are sounding the alarm: Staying competitive will require more than just keeping pace. It demands bold, forward-looking investment in technology.
While many Canadian companies are holding their own globally, nearly all executives surveyed say that’s not enough. They believe businesses must go further, faster, or risk falling behind the U.S. in critical areas like productivity and innovation.
A striking 88% say Canadian companies can’t afford to be cautious or wait for consensus before adopting new technology. And more than half admit they simply don’t have the financial breathing room to make those investments right now.
That’s why business leaders are calling for urgent action from government. A full 90% say policymakers must move quickly to ensure Canada remains competitive and prosperous, warning against the dangers of “complacency.”
Their top asks?
- Remove interprovincial trade barriers and harmonize regulations and credentials (64%)
- Conduct a comprehensive tax review to improve competitiveness (58%)
- Streamline approvals for resource and major infrastructure projects (56%)
Trade tensions with the U.S. are pushing Canadian businesses to look elsewhere
Trade tensions with the U.S. are no longer just background noise. They’re reshaping how Canadian businesses think about growth, investment and global strategy.
Three-quarters of Canadian business leaders say they no longer see the U.S. as a reliable trade partner. Nearly eight in 10 are actively diversifying their export strategies to reduce reliance on the American market.
This isn’t just talk. More than two-thirds are already investing in marketing and building relationships in new international markets, a long-term shift that’s unlikely to reverse. Even if trade relations with the U.S. improve, 90% of respondents say they plan to continue expanding beyond their southern neighbour.
But the uncertainty is also having a chilling effect on investment at home. Over half of executives say they’ve already cut back on research and development or capital spending for the year ahead. Another 50% say they plan to scale back in the near future, citing the broader fallout from the U.S.-led global trade disputes.
Survey methodology
KPMG in Canada surveyed 250 business leaders in all industry sectors across Canada between May 9 to 20 on Sago’s business panel, using Methodify’s online research platform.
The makeup of the companies is as follows: 31% lead companies with annual gross revenue between $500 million and $1 billion, a quarter report revenue between $100 million and $300 million, 22% have revenue between $300 million and $500 million, 12% between $10 million and $100 million and 10% over $1 billion. No companies under $10 million in annual revenue were surveyed.
Over half (52%) of the companies are privately held, 28% are owned by private equity firms, 18% are publicly traded with headquarters in Canada, and 2% are foreign-owned subsidiaries.
With files from Leslie Kennedy
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
