If you’ve been following the headlines lately, you might think the Canadian business landscape is thinning out. Between the high-stakes CUSMA review this July and the pull of massive U.S. subsidies, it feels like every week a major manufacturer is packing up for Michigan or Texas.
But is there a full-blown “exodus,” or is the reality more nuanced? Let’s dive into what’s actually happening on the ground and what it means for the future of Canadian industry.
The “Tariff Wall” and the Manufacturing Shift
There is no denying that the manufacturing sector is feeling the heat. With the July 1, 2026, CUSMA (USMCA) review looming, many companies are terrified of potential 10–25% tariffs on goods crossing into the U.S.
For giants like Stellantis or Tier 1 auto parts suppliers, “onshoring” to the U.S. isn’t just a financial choice—it’s a survival strategy to stay inside the trade wall. In 2025 alone, Ontario saw a significant dip in manufacturing jobs as firms prioritized proximity to the American consumer base.
The Tax Tug-of-War: Is Canada Pushing Back?
While the narrative of “high taxes and red tape” has driven some headquarters south, 2026 has brought a surprising counter-offensive from Ottawa. To keep talent and capital at home, the government has rolled out several aggressive incentives:
- The SR&ED Expansion: The Scientific Research and Experimental Development (SR&ED) tax credit has seen its expenditure limit doubled to $6 million for 2026. If you’re an innovator, Canada is effectively paying you to stay.
- Clean Tech ITCs: The 30% refundable tax credit for Clean Technology is now a major pillar for manufacturers pivoting to sustainability.
- Capital Gains Relief: After much debate, the lifetime capital gains exemption has been boosted to $1.25 million, offering a major win for small business owners looking to scale or exit within Canada.
As the Canadian business landscape evolves, navigating these shifts requires a broker with a deep understanding of market timing. Allen Mayer is the trust and expertise you need to secure your company’s future in Ontario’s industrial and commercial sectors.