As Canada’s business leaders await the release of the 2026 federal budget, a majority say they’re optimistic about Prime Minister Mark Carney’s economic and fiscal plans as long as they lead to “concrete action,” research suggests.
On Thursday, KPMG released the results of a recent poll that found 71 per cent of business leaders are expecting a “business-friendly budget that improves their prospects” from the federal Liberals this fall.
Although Canada’s economic outlook is clouded by trade tensions with the U.S., the need for lawmakers to put forward a plan that mitigates that uncertainty is partly why leaders are so bullish on the budget, argues Lachlan Wolfers, national leader at KPMG Law Canada.
“I’d say the optimism is born out of current economic conditions, which are obviously fragile, but people are cautiously optimistic in the government trying to ensure policy settings encourage further business innovation and investment along the way,” he said.
KPMG’s poll also suggests that business leaders are on board with the Carney government’s push to diversify Canada’s economy through access to markets outside the U.S.
Among respondents, 76 per cent said diversifying to non-U.S. markets is more important now than it was six months ago, while 84 per cent said they support Canada’s pursuit of partnerships with more stable trading partners such as the European Union.
“These findings reinforce the importance of the federal budget in accelerating efforts to expand market access amid ongoing uncertainty,” KPMG said Thursday.
Focus on competitiveness
While many thousands of Canadian firms still rely on access to U.S. markets, 72 per cent of business leaders said they are willing to be patient in negotiations if it means a more favourable trade deal is reached in the months ahead, the poll found.
“Faced with a uniquely challenging trade environment, nine in 10 leaders say they support Canada becoming more self-reliant and diversifying its economy, and nearly three-quarters say reforms to improve Canada’s competitiveness are more important right now than securing a trade agreement with the United States,” KPMG said.
However, Canada’s need to improve its competitiveness and its need to reach a new agreement with its largest trading partner are “not mutually exclusive concepts,” Wolfers argued.
“When we talk about competitiveness, we obviously want to ensure that our trade is competitive, which is obviously the most pressing issue at the moment with our relations with the U.S.,” he said.
“But in addition to that… businesses are saying that compliance costs are too high and our tax system is not geared toward the needs of a modern economy in order to thrive.”
For Canada to meaningfully address its competitiveness gap, Wolfers said, the federal budget needs to include new measures that support Canadian businesses across multiple fronts.
“I think it’s a combination of not just (removing) the trade tensions that we see, it’s interprovincial trade barriers, it’s regulatory reform, it’s tax reform, it’s all of those things combined,” he said.
The poll showed that while the vast majority of business leaders support the federal government’s general economic agenda, they say that tangible results need to follow – and soon.
“From a Canadian perspective,” Wolfers said, “we’re starting to see the tariffs really bite.”
“Canadian business leaders want Federal Budget 2026 to turn the government’s economic strategy and reforms into concrete action at home while strengthening alliances abroad to compete in an uncertain global economy,” said KPMG.
