Canadian businesses are less confident than their U.S. counterparts about the stability of North American trade over the next five years, with many seeking alternative suppliers and export markets as tariffs and shifting trade policies add costs and complexity.
A new report commissioned by Livingston International, a customs brokerage and trade consultancy, found that 25 per cent of Canadian businesses lack confidence in the stability of the North American trade environment, compared with eight per cent of U.S. businesses.
The findings suggest Canadian companies are reassessing their supply chains and international sales strategies as they navigate trade uncertainty, with nine in 10 Canadian importers considering alternative sources of supply and 85 per cent of exporters exploring other markets.
Businesses look beyond North America
Livingston's 2026 Trade Dynamics Report found that Canadian businesses are considering markets in Asia, Europe and Latin America as alternatives to their existing trading relationships. Among exporters, 82 per cent identified countries in Asia as key alternative markets, while 58 per cent cited the European Union and United Kingdom and 50 per cent pointed to Central and South America.
"Canadian businesses recognize that a new dynamic has taken shape in North America and while there continues to be - and will likely always be - a natural tie to the U.S. market, many businesses are looking at opportunities in other markets to de-risk from future disruption and explore new export opportunities," said Robert Smith, chief executive officer of Livingston International.
Despite the search for alternatives, most Canadian businesses continue to use the United States-Mexico-Canada Agreement. However, only one-quarter of Canadian companies surveyed said the trade agreement gave them a reason to feel confident about the North American trading environment.
Canadian businesses were also less inclined than their U.S. counterparts to bring production currently located outside North America back to the continent. The report found that 68 per cent of Canadian businesses were considering such a move, compared with 84 per cent of U.S. businesses.
Trade disruptions add to business costs
The report found that tariffs and other trade disruptions are affecting companies' costs, with many passing at least some of the additional expenses on to customers.
About 64 per cent of Canadian businesses said they were passing some or all of the cost of tariffs on to consumers, while 20 per cent were absorbing the full cost themselves. Only 14 per cent reported being minimally affected or unaffected by changing trade policies.
"Both empirically and anecdotally it is clear from our research that Canadian importers and exporters are feeling the weight of fast-paced and frequent changes to trade policies and processes," said David MacDonald, group vice-president of financial services at Environics Research, which conducted the study.
The financial pressures come as businesses also face challenges understanding and complying with changing customs requirements. Nearly two-thirds, or 63 per cent, of Canadian businesses said they were only somewhat prepared or ill-prepared for policy changes and had worked to ensure compliance but struggled to validate their level of customs compliance. The comparable figure among U.S. businesses was 76 per cent.
The findings also point to difficulties finding the expertise needed to manage trade changes. Between 71 and 73 per cent of Canadian businesses reported struggling to find the talent and knowledge needed to understand regulatory changes and compliance requirements, keep pace with evolving trade policies and use emerging technology to automate trade compliance.
Companies face compliance challenges
The report highlights the operational demands facing importers and exporters as they adapt to changing trade rules and seek to manage risks across international supply chains.
"The shifts taking place in today's North American trade environment have brought to the forefront the complexity in managing continental and global supply chains, and the importance of getting ahead of potential disruptors before they unexpectedly add risk, cost and effort," said Smith.
The research was based on an online survey of companies in Canada and the United States across 12 industries, conducted between Aug. 20 and Sept. 9, 2026.
Livingston International specializes in customs brokerage and trade compliance, as well as international trade consulting, global trade management and freight forwarding. The company employs approximately 2,700 people at border crossings, seaports, airports and other locations across North America, Europe and Asia.