Trade War with U.S. Slows Investment, Pressuring Municipal Economies in Canada

A new report produced in collaboration with the Federation of Canadian Municipalities details the impact of the trade war with the United States on Canadian economies. The study, based on responses from 31 municipalities across nine provinces, found that the trade tensions have led to a significant slowdown in new investment across Canada. The report also noted that 42 per cent of surveyed municipalities reported investment delays or outright cancellations of new projects due to a prevailing “wait-and-see” business approach.

The findings suggest that businesses are currently absorbing cost and supply chain pressures rather than committing to major operational changes like layoffs or relocation. While the report stated that as of May 2026, there were no widespread permanent business disruptions from relocations south of the border, this remains a persistent threat as long as trade tensions continue.