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Polling data shows many leaders are doing more business at home and looking for alternatives to U.S. suppliers

Published Feb 28, 2025  •  Last updated 24 minutes ago  •  3 minute read

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A looming trade war between Canada and the United States is causing strain between the two countries. Photo by Jason Payne/PNG files

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In the face of a trade war, Canadian business leaders are making big changes in the way they conduct operations — and many are moving away from their longtime trading partner on the other side of the border, according to a Léger survey conducted in conjunction with Financial Post.

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The survey of 247 senior Canadian business leaders revealed that the majority (58 per cent) feel Canadian businesses should not be confident that their southern neighbour will be a reliable trading partner in the years to come.

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“We’re talking about a seismic change in the way the Canadian economy is functioning, in the way we (have been) working with our main trading partner for decades,” said Sébastien Dallaire, executive vice -president of the Eastern Canada team at Léger.

“(This has the) potential for massive disruptions in the Canadian economy and on the American side as well, because a lot of states really depend on trade with Canada.”

Dallaire believes this might have the most damaging repercussions for the U.S. “Not only are business leaders saying that they are concerned about the threats and they’re already taking action, but they’re thinking long term,” he pointed out. “It means there’s potentially a permanent loss … coming from the fact that Canadian businesses are looking elsewhere.”

The report highlighted that tariff threats from the U.S. have already significantly impacted business decisions. Nearly half of business leaders said they’ve started buying or investing more in Canada, while 42 per cent have begun looking for alternatives to American clients or suppliers.

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The polling data showed 41 per cent of these business leaders sell products to and 65 per cent purchase products from the U.S., but most do not hire employees south of the border.

Although business leaders were less likely to report that they’ve reduced or postponed hirings and investments or pulled back on spending, a significant chunk of respondents were still considering doing so.

Dallaire noted that some business leaders could be waiting things out, since tariffs haven’t hit just yet, or could be in industries that aren’t as dependent on trade with the U.S. and don’t feel they will be hit as hard.

For example, more than a quarter of respondents said tariff threats did not change their relationship with American clients and partners and 20 per cent said this question wasn’t applicable to them or they didn’t have clients or partners in the U.S..

Still, Canadian business leaders have major concerns about the domestic economy, with 43 per cent concerned it will deteriorate and 79 per cent worried about inflation over the next six months.

A vast majority (84 per cent) are, unsurprisingly, troubled about the upcoming torrent of American tariffs on Canadian exports. U.S. President Donald Trump’s 25 per cent sweeping tariffs are expected to move ahead on Tuesday, while tariffs on steel and aluminum are scheduled for March 12 and reciprocal tariffs could go into effect in early April.

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Another sizable group of respondents (59 per cent) fear that Trump could use various measures, such as tariffs and trade sanctions, to try and force Canada to become the 51st state of the U.S.. Trump has stated before that he would be willing to use “economic force” to annex Canada.

Despite these fears, Dallaire said the survey results show Canadian business leaders, including those who do business in the U.S., are standing up for themselves and demonstrating their resolve, even if this could hurt their businesses.

Eighty-two per cent of respondents said they’re not considering moving or expanding operations to the U.S. to avoid tariffs or any uncertainty caused by tariffs. And more than three-quarters of business leaders were in favour of dollar-for-dollar retaliatory tariffs, even though this could potentially lead to higher business costs or reduced demand for their products across the border.

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“It reflects what we’re measuring in the Canadian public opinion at large,” Dallaire noted, pointing to the Buy Canada movement. “(There’s) a moment of solidarity, moment of rallying around the flag, more patriotism and (people) saying ‘It’s time for us to fight back and to stand together.’”

The survey was conducted between Feb. 21 to Feb. 25 among members of the LEO Decision panel, a proprietary group of Canadian business leaders, established by Léger in collaboration with HEC Montreal.

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