Tariffs led to price changes for majority of Canadian businesses: KPMG poll

A significant majority of Canadian large and mid-sized businesses have altered their pricing strategies in response to U.S. tariffs, according to a recent survey by KPMG. The National Business and Trade Outlook survey, which included 359 business leaders, found that 66% of participants have made pricing adjustments to offset the increased costs associated with tariffs.

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I think we’re going to see that for a period of time, although obviously governments, both here and the U.S., is very focused on managing inflation in the economy.

Of the businesses that adjusted prices, 35% passed some of the tariff-related costs onto their customers, while 31% transferred the full cost. Another 15% of businesses reported finding alternative ways to reduce expenses to absorb the impact. Lachlan Wolfers, national leader for KPMG Law, suggests that while many businesses initially absorbed some tariff costs, this trend is likely to shift, with up to 80% of costs potentially being passed on to consumers over time.

Wolfers also noted that governments on both sides of the border are focused on managing inflation, which could influence future pricing decisions. Tariffs, which are duties on imported goods, currently affect Canadian steel, aluminum, lumber, automobiles, and semiconductors. The survey was conducted from June 25 to July 13, predating the U.S. announcement of new 50% tariffs on Canadian dairy, alcohol, vehicles, cosmetics, and other goods on August 19. Wolfers expressed concern that these new tariffs and an approaching negotiation deadline could skew current survey results toward a more short-term business perspective.

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Canadian businesses were looking at this a little bit more from a longer-term perspective.

Approximately 72% of the businesses surveyed engage in international exports, and 79% of those confirm their exported products comply with the Canada-United States-Mexico Agreement (CUSMA). The findings highlight the ongoing economic pressure Canadian businesses face due to trade disputes and the complex decisions involved in managing costs and maintaining competitiveness in the market.

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My concern, if you carried out a survey right now, you are looking at staring down the barrel at potential 50 per cent tariffs and a deadline for negotiations with the U.S. that could skew the results to a more shorter-term perspective.