Aug 13, 2026
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Add us on GoogleCanadian businesses are increasingly abandoning efforts to absorb international trade tariffs, passing the financial strain directly along through supply chains and onto retail shelves.
While cross-border trade friction and retaliatory duties have impacted commercial operations across North America for months, fresh corporate data shows that commercial leaders have largely exhausted their internal cost buffers.
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According to the KPMG National Business and Trade Outlook survey, two-thirds (66%) of Canadian business leaders confirm they have already adjusted their pricing structures specifically to account for tariff-related expenses.
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The findings reflect input from 359 decision-makers at mid-sized and large Canadian firms recruited through the Angus Reid Forum, representing commercial enterprises with annual revenues ranging between $10 million and $20 billion.
Data reveals sharp split in corporate pricing strategies
The survey underscores a growing divide in how major industries handle trade friction. While corporate responses vary depending on margin flexibility and sector exposure, absorbing the full blow of trade duties has become a minority strategy.
According to the survey data, Canadian business responses to tariff costs breaks down as follows:
- 35% adjusted prices to pass along a portion of tariff costs
- 31% passed along the full tariff cost through higher end prices
- 39% made no tariff-related price changes
- 15% found internal operational efficiencies to reduce costs elsewhere
(Note: Survey respondents were permitted to select multiple operational adjustments.)
A detailed look at the data shows that 66% of commercial entities have implemented price hikes linked directly to import fees, leaving only a fraction of companies able or willing to cut internal operating expenses to insulate their market share.
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Expert warns of further price pass-throughs ahead
While nearly 4 in 10 business leaders reported making no tariff-related price adjustments to date, industry analysts note that initial strategies aimed at protecting buyers are rapidly shifting.
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In the early stages of supply chain disruption, firms frequently accept reduced profit margins, freeze internal capital expenditures or restructure supplier networks to shield customers from immediate price shock. However, as trade barriers persist, these temporary measures are proving unsustainable over long operational horizons.
Corporate law and tax experts caution that price adjustments seen across Canadian sectors are only an initial wave.
“Many Canadian businesses were adopting an initial approach of absorbing some of the tariffs and obviously seeing how things played out. The longer-term suggestion is it moves to closer to 80% is passed on through to consumers,” Lachlan Wolfers, national leader for KPMG Law said in the report.
As multi-tiered supply chains process higher landed costs on raw inputs and component parts, secondary markups will continue working their way through wholesale distributors. With business balance sheets reaching capacity limits, additional duty costs will move directly to final transaction totals.
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Leslie Kennedy served as an editor at Thomson Reuters and for Star Media Group, followed by a number of years as a writer and editor and content manager in marketing communications, before returning to her editorial roots. She is a graduate of Humber College’s post-graduate journalism program and has been a professional writer and editor ever since.
