Navigating change, seizing opportunity

Business leaders across Canada continue to show remarkable resilience. Though caution remains, results from the latest KPMG Private Enterprise Business^™ Survey found that the 2025 Federal Budget has triggered new optimism from private businesses.

More than twice as many private business leaders said they are now more confident in Canada’s economic growth prospects than they were before the budget was announced, compared to those who have become less confident (54 versus 26 per cent).

Budget 2025 focuses on attracting investment from, and increasing exports to, markets beyond the U.S.; building capacity and resilience across critical sectors; and driving innovation and productivity in critical sectors.

For Canadian privately held businesses, this strategic evolution in the country’s trade policy should be viewed as an opportunity to newly prioritize market diversification (including interprovincially), embed resilience into their business models and modernize their operations.

Despite feeling more confident post-budget, however, uncertainty persists. Going forward, business leaders must carefully re-evaluate their goals and consider how they can get ahead of shifting market priorities.

As uncertainty grows, so does the need to perform and execute as effectively as possible, especially to mitigate risk and strengthen resilience. To also seize opportunities presented in the budget, private businesses in particular are looking for infusions of capital. Unfortunately, 73 per cent of them are having difficulty accessing the capital they need to address current trade and economic uncertainty.

The impacts of a capital squeeze can be felt organization-wide as private businesses are forced to scale back expansion plans (50 per cent), eliminate redundant roles (45 per cent) and reduce investments in new technology (39 per cent)—all of which may further exacerbate other short-term challenges.

Economic and trade uncertainty in general dominates near-term decision-making, with 69 per cent identifying it as the top factor in their strategic thinking, followed by market competition (46 per cent), talent acquisition and retention (41 per cent), cybersecurity (40 per cent) and regulatory pressures (38 per cent).

Despite this uncertainty, there is real optimism. The central challenge, for everyone, is to sustain it.

Canadian private businesses are aligned with the Budget 2025’s priorities. To take advantage of potential growth opportunities, private businesses say they will take the following actions over the next 18 months:

• 34 per cent will seek out government funding or tax incentives.
• 36 per cent will make a major acquisition.
• 32 per cent will reduce operational costs.
• 31 per cent will diversify markets with new domestic customers.
• 30 per cent will diversify markets with new non-U.S. customers.
• 30 per cent will expand operations in Canada.
  
  

Aligned with this set of priorities, some Canadian private businesses are actively adapting their strategies, particularly in the context of infrastructure investment.

However, these businesses are split as to whether they can pivot, shift or retool from supplying U.S. customers with goods and services to supplying Canada with the inputs needed to build infrastructure projects. A third (34 per cent) say this will be easy; whereas 38 per cent say it will be difficult.

Privately held businesses are most optimistic when it comes to the possibility of pivoting to supply Canada’s infrastructure ambitions (40 per cent), as compared to private equity-backed firms (33 per cent), publicly listed companies headquartered in Canada (25 per cent) and Canadian subsidiaries with foreign parent companies (only 11 per cent).

Logistically, companies are split on the timing needed to reasonably pivot. Forty-two per cent of private businesses believe it can be done within three to six months, while 41 per cent of private equity-backed firms believe they could transition within a year.

But, either way, they can’t do it alone: 67 per cent say they expect the federal or provincial governments to help support them in making the shift, whether through grants and loans or tax incentives—a proportion that rises to more than 70 per cent of manufacturing, construction and energy companies.

As market conditions continue to shift and evolve, Canadian private businesses should be focused on a few key priorities:

Scientific Research & Experimental Development (SR&ED) credits can help private businesses accelerate entry into new sectors, expand their customer base and invest in capabilities that increase market opportunities domestically and internationally beyond the U.S. Collaborating closely with advisors to understand eligibility and optimize applications will position organizations to capitalize on these measures and drive sustainable growth.

Private businesses should take a holistic approach to reviewing cost structures, operational processes, and financing options. Exploring alternative lenders, government-backed funds, and strategic partnerships can help unlock new capital to fuel operational upgrades. Simultaneously, reassessing budgets, renegotiating supplier agreements and streamlining workflows will enhance agility and help businesses respond more effectively to evolving opportunities and challenges across diversified markets.

Private businesses should prioritize upskilling and workforce development initiatives to ensure teams are equipped for current and emerging needs. Embracing technology advancements throughout their operations and customer interactions—including AI and cybersecurity—will help improve productivity, safeguard against risks and enable seamless expansion into new markets.

The 2025 KPMG Private Enterprise Business Survey finds that Canadian private businesses are focused not on simply on cutting costs—they’re expanding their customer base, pursuing new partnerships and preparing to pivot toward nation-building projects. They’re also assessing their capacity to shift operations quickly, moves whose successful execution will depend on organizational cultures of adaptability that are supported by clear processes and empowered teams.

However cautious, optimism under these circumstances is justified—provided you’re ready to act.

KPMG Private Enterprise is a one-stop-shop dedicated exclusively to privately held businesses, including entrepreneurs, family businesses (including family offices), private capital providers and private wealth clients. Our cross-functional teams support clients with their most pressing challenges, including accessing capital, navigating tax complexity and compliance, planning succession and divestiture, and mitigating risks.

These are the findings of a study conducted by Angus Reid Group on behalf of KPMG from November 5-14, 2025 among a sample of n=252 decision-makers (director, vice-president, CEO, or other C-level) at firms in Canada with an annual gross revenue of $50 million CAD or more. The survey was conducted in English and French. For comparison purposes only, a probability sample of this size in the general population would carry a margin of error of +/- 6.3 percentage points, 19 times out of 20.