An interesting report from Bloomberg following a survey conducted by KPMG of Canadian manufacturers. Keep in mind this is a survey of companies within Canada that do traditional manufacturing of products; this is not a survey of companies that assemble foreign goods for export – there is a substantial difference.
As noted within the report, approximately 10% of Canadian GDP comes from Canadian manufacturing. Within that sector there are multiple companies now planning or considering moving out of Canada into the United States.
Many will claim the trigger for the consideration is based on the potential elimination of the USMCA (CUSMA) trade agreement, and there is truth to that aspect. However, the systemic issues within Canada -including energy policy, regulation and corporate tax burdens- represent the larger problem; the termination of the USMCA is the straw that breaks their back.
The domestic hurdles to manufacturing, are the bigger issues that cannot be negotiated away in U.S-Canada trade agreements. Specifically, the low-price and stable energy policies are the core consistencies that are no longer present in Canada; that fundamental cannot be easily fixed.
BLOOMBERG – […] KPMG Canada said on Tuesday that 42 per cent of Canadian manufacturing companies indicated they have or are considering moving production to the United States. Of those considering relocating, 77 per cent expect to make the transition within the next two years.
[…] the issues go beyond the trade situation though, with Canada needing to create a competitive environment for manufacturers to grow.
“This survey clearly shows that manufacturers need to feel more comfortable and see some action from the government in order to continue to produce and invest and grow in Canada,” she said.
“Some of the key factors that companies have cited are more certainty around interprovincial trade barriers, they need more tariff certainty, they want to see lower corporate taxes, they want better access to capital and cheaper energy.”
The survey also found 57 per cent of manufacturing firms have paused, reduced or cancelled capital investment projects. Thirty-six per cent said they have scaled back investments, 12 per cent have paused their plans and nine per cent have cancelled planned spending. (read more)
This survey is further evidence of the scale of leverage President Trump and USTR Jamieson Greer carry toward the Canadian trade negotiations. Quite simply, despite their unwillingness to accept reality – Canada is economically dependent on the United States as the customer for any export.
Without the USMCA (CUSMA) trade agreement Canada is structurally incapable of economic growth.
AWESOME !!!
All I can say is, “Welcome in… welcome in… welcome in!”
©️ Baron Coleman
I’ll allow it.
The US has a stable energy network but the costs of power generation have increased substantially for the consumer in the past 5 years.
This is a major underlying issue that isn’t getting the attention it deserves, but it’s really eating into the monthly budget of your average American, myself included.
And how is the explosion of new AI centers across the country going to impact the consumer pocketbook?
Good question, as yet unanswered.
They already hide the huge amounts of fresh water they use.
What happened to all of the consumer watchdogs?
I forget what website I was perusing, yesterday, but there are ‘issues’ in the background, as the idea of ‘surge pricing’ is coming up again.
Stupid solar and wind is the cause
Every city used to generate it’s own electricity locally. We need to get back to a model where cities are again generating most of their own power and sending excess into the grid, not drawing all of their electricity from it. Every large city should have a small safe MSR reactor to increase resilience and reduce costs.
Ouch! Not surpised though! Shouldn’t have painted yourselves in a corner.
And, as it all falls apart in Canada, the good ole USA is going to be Carney’s scapegoat once again. The question then becomes; how long can they keep going down this path of systemic destruction and what harmful effects will that have on our country?
Wait until these WEF Canadian carpetbaggers pass laws to prevent businesses from moving to the U.S.
💯 🎯 As always!
One lesser-known factor that exacerbates this situation is that some of these manufacturers can face stiffer barriers to inter-Provincial trade within Canada, if that’s also their market. So it may actually end up being cheaper for them to export into Canada from the US. 🤪
Huh?
But Frosty, when I ask Grok about this it tells me:
“Inter-Provincial Tariffs and Trade in Canada:
Canada’s Constitution (specifically provisions under the Constitution Act, 1867) prohibits provinces and territories from imposing tariffs or customs duties on goods moving between them. There are no formal inter-provincial tariffs.”
True dat. But all these barriers are cunningly named “non-tariff barriers (NTBs)”. 🤯
Ask Grok about NTBs instead and you get:
“Persistent barriers are almost entirely non-tariff barriers (NTBs), often equivalent in economic effect to tariffs of 7-21% (or higher for services) depending on the study. These raise costs, reduce competition, and fragment the market. Estimates suggest full removal could boost GDP by up to $200 billion (roughly 7-8% or more in productivity gains) and lower consumer prices by 7-15%.
Major Types and Examples of Inter-Provincial NTBs
Regulatory/Technical Differences: Varying product standards, labelling, packaging, vehicle weights/dimensions (impacting trucking), safety certifications, and construction codes. Businesses may need province-specific versions or re-testing.
Professional Licensing and Labour Mobility: Workers (e.g., trades, health professionals, teachers) often need re-certification or additional training when moving provinces. Recent mutual recognition efforts aim to address this.
Procurement Preferences: “Buy local” or preferential rules for government contracts (many federal exceptions removed, but provincial ones remain in some cases).
Sector-Specific Restrictions:
Alcohol: Provincial liquor control boards often restrict direct-to-consumer shipments across provinces (e.g., wine from one province to another).
Agriculture and Supply Management: Quotas, marketing boards for dairy, poultry, eggs; varying standards for food products.
Transportation/Trucking: Differing rules add costs (e.g., ~8% to freight).
Other: Differences in business registration, environmental rules, energy, fisheries, and more. Exemptions still exist in CFTA for areas like culture, public safety, Indigenous rights, and some resource management.
These NTBs are hard to list exhaustively because they stem from thousands of regulations across jurisdictions rather than a single tariff schedule. Progress continues via the Committee on Internal Trade, but full harmonization remains incomplete, especially for food, alcohol, and certain services.”
And yes, Carnage pledged to remove all these barriers at record speed before he was “elected”. Guess how many are gone so far… 😉
🤮 😡
more certainty around interprovincial trade barriers,
Yes, the provinces tariff each others goods and long before Trump.
It’s why one of the first things Communist countries do, when they get into power, is to restrict all internal and external movement. They can’t survive otherwise.
But but but Carnage is making a bank with Zelensky (or is it making bank?) and that will change everything for Canada.
And sharing a bunk?
Great, in a couple of decades we’ll be partly able to overcome the massive shift of almost everything to China by Wall Street via the (bought) fedgov that allowed them to do that. By partly I mean that the vast majority of Walmart variety items won’t be returning, nor will the vast majority of critical items like generic pharmaceuticals, strategic minerals (our environmental requirements – we can’t just dump stuff in rivers), etc. And, of course, to be even remotely price competitive everything will need to be automated.
And now, after the ignored warnings from many about building up China with Wall Street funding and IP transfer/theft, we suddenly find that they’re a hegemonic adversary which requires a $1.5 TRILLION dollar military budget while we are forced to continue to fund their rise by buying things no longer made here.
The perfect self-licking MIC ice cream cone… until the ultimate confrontation.
Lenin was right as told in the commie adage heard in various forms that is the basic message of a much longer quote from him: “A capitalist will sell you the rope you hang him with” to which I will add “when bought government doesn’t restrain him from doing so” by countering a fundamental flaw of capitalism: short term profit seeking without foresight.