As the federal government prepares its upcoming budget, Canadian business leaders are urging Ottawa to expand financial supports, improve access to capital and introduce structural tax reforms to help businesses weather economic uncertainty, according to a new survey from KPMG in Canada.
The 2025 KPMG Federal Budget Survey, which polled 501 business leaders across Canada, found that more than 90 per cent of respondents want broader sectoral support and financing options for companies affected by tariffs. The findings highlight concerns over rising business costs, reduced competitiveness and dependency on the United States.
“As U.S. tariffs cast a shadow over the Canadian economy, the vast majority of business leaders are supportive of the government’s plans to confront Canada’s economic challenges and make capital investments that accrue long-term benefits,” said Lucy Iacovelli, Canadian managing partner, tax and legal, at KPMG in Canada.
“More urgently, however, many companies are looking for a bridge to help them sustain and transition their businesses beyond the U.S. market, so they can participate in ‘Build Canada’ opportunities and compete on the global stage,” she added. “Our survey pointed to the need for the Canadian government to invest in improving the business environment by delivering on wider access to low-cost financing and capital, tax relief that attracts investment, less red tape, and greater incentives to innovate.”
Iacovelli said immediate support is also needed in the near term. “While the focus of the upcoming federal budget is to make a generational investment in building the economy, the government also needs to make expenditures that provide immediate relief and sustain capital for businesses and sectors that are struggling right now.”
According to the survey, 84 per cent of companies trading directly with the U.S. said tariffs have driven up business costs. Eighty per cent reported struggling with competitiveness due to higher import and production costs and lower revenues. Overall, 96 per cent of respondents believe overreliance on the U.S. is the greatest risk to Canada’s economic future.
Other key findings include:
- 92 per cent want the government to improve access to domestic markets by streamlining regulations, enhancing labour mobility and reducing transportation costs.
- 97 per cent believe programs must be expanded to help businesses enter non-U.S. markets and engage with strategic trading partners.
- 91 per cent say financing and loan options should be expanded for sectors impacted by tariffs.
- Nine in 10 respondents want a national industrial strategy and innovation plan to support technology investments and global competitiveness.
Survey respondents also emphasized the importance of trade-enabling infrastructure, with 96 per cent supporting efforts to help Canada’s energy sector access international markets.
On the tax front, business leaders widely agreed that reform is necessary to unlock investment and restore competitiveness.
“Clearly, the government faces some hard fiscal choices in the upcoming budget, since spending seems certain to materially exceed revenues, and additional borrowing increases already-high debt-servicing costs,” said Brian Ernewein, senior advisor, national tax, at KPMG in Canada. “If the size of government is not going to shrink, then its revenues need to increase. However, it is difficult to see where there is room to increase personal or corporate income taxes. In fact, current top personal tax rates are likely impeding productivity and growth, and a lower combined federal-provincial corporate tax rate is required to restore Canada’s competitive rate advantage.”
“These realities point to the need for the government to reconsider the level of various consumption taxes,” Ernewein added. “All taxes – including consumption taxes – impose a cost on the economy. However, consumption taxes impose less damage than personal or corporate income tax, and represent a stable source of government revenue.”
Among tax-specific findings:
- More than 90 per cent support a 2 to 4 per cent cut in the corporate tax rate to stimulate investment and entrepreneurship.
- Nine in 10 want a clear timeline for corporate tax reform.
- 90 per cent believe R&D tax incentives, including a patent box regime, must be improved.
- 90 per cent support immediate expensing for certain business costs.
- 92 per cent want greater austerity and reductions in government waste.
The survey, conducted between Sept. 11 and Oct. 2, 2025, used the Methodify platform by Sago. Respondents included business owners and executive decision-makers from a range of sectors. Companies ranged in size from $10 million to over $1 billion in annual revenue.
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