By Jennifer Kervin
December 31, 2025
DIGITAL JOURNAL
Photo by Getty Images on Unsplash Plus
Before Canadians start comparing prices, powertrains, or brand badges, they are sending a clear signal about the auto sector itself.
A new consumer automotive survey from KPMG Canada shows that 72% of Canadians say it is very or somewhat important that their vehicle is assembled or built in Canada.
That data point reframes the broader debate facing the industry.
Manufacturing footprint has become a proxy for trust, economic contribution, and long-term commitment when the sector is under pressure from trade uncertainty and rising costs.
“With U.S. tariffs disrupting the industry, Canadians in the market for a new vehicle are looking to the brands they trust at prices they can afford in models they want, and increasingly, on where those vehicles are built,” says Dave Power, partner and national automotive sector leader at KPMG in Canada.
Power points to Toyota and Honda, which both maintain large manufacturing operations in Ontario, as brands that continue to resonate with Canadian buyers. At the same time, trust in the Detroit Three appears to be eroding as Canadians perceive less commitment to keeping jobs in Canada amid U.S. trade pressures.
For business leaders and policymakers, the survey shows that manufacturing location, affordability, public investment, and EV ambition are increasingly tied together, narrowing the range of viable choices ahead.
That convergence becomes most visible when the conversation turns to price.
While manufacturing location has emerged as a trust marker, affordability remains the pressure point that exposes whether the system can hold. Survey data suggests Canadians are reaching the limits of what they are willing and able to absorb as costs rise across the automotive value chain.
Affordability is now a structural signal
Price still dominates decision-making, but the margin for error has narrowed.
Sixty-two percent of Canadians say they will not spend more than $50,000 on a new vehicle, down from 75% in KPMG’s 2022 survey.
Nearly three-quarters (76%) worry that ongoing trade tensions and tariffs will push prices even higher. Almost a quarter (23%) say tariffs have already priced them out of the new vehicle market, while another 38% say a further 10 to 15% increase would do the same.
For manufacturers and suppliers, rising costs tied to trade policy, supply chains, and production decisions are colliding with increasingly constrained willingness to pay, putting pressure on volume assumptions and long-term planning.
Subsidy expectations are shifting away from incumbents
One of the clearest signals in the survey is how Canadians believe public investment should be directed.
Only seven percent support continued subsidies for the Detroit Three (GM, Ford, and Stellantis).
Instead, 37% want funding directed toward Canada’s auto parts supply industry, and 58% support diversification into defence manufacturing as a way to protect jobs and build resilience.
“People want long-term strategy, not short-term patches,” says Power. “Canadians are calling for strategic investments that safeguard manufacturing jobs while strengthening the foundation for the entire automotive ecosystem.”
The implication is a shift from firm-specific support toward system-level capacity, challenging long-standing assumptions about how governments stabilize the sector and what success should look like.
Trade risk is shaping strategic decisions
With CUSMA set for review in 2026, 72% of respondents worry vehicle prices will rise if Canada loses protection under the agreement. Half (51%) believe Canada’s automotive industry cannot survive without trade protections or a new agreement with the U.S.
Joy Nott, partner in trade and customs at KPMG, says potential changes to rules of origin could force a restructuring of supply chains.
“If the CUSMA rules of origin change substantially to require even more North American content, this could have a dramatic impact on existing automotive supply chains,” she says. “This disruption would require a search for new North American suppliers to replace overseas manufacturing. While disruptive and likely to increase costs, this change could also create opportunities for Canadian manufacturers to expand and diversify their business.”
That uncertainty shows up in everyday decisions, like whether to expand a plant, lock in a supplier, or wait another year before committing capital.
EVs are the execution test, not the solution
More than half of Canadians (55%) believe the country could become a global leader in electric vehicles and battery production, and 52% want governments to make that a priority.
Governments have already committed billions toward that ambition.
The survey suggests support is conditional, with affordability a central concern and infrastructure and domestic supply chains top of mind.
Canadians are questioning whether the system can deliver them at scale and at a price that works, not rejecting the idea outright.
“With all the turmoil in the auto sector, Canada has a real opportunity to invest at home and diversify into EV battery production to protect jobs, attract investment, and build long-term resilience,” says Power.
“What’s needed is a clear roadmap to accelerate Canada’s leadership, bearing in mind that building affordable EVs will be essential, particularly to compete with lower-cost models from foreign manufacturers, as will significant investment in a robust charging infrastructure.”
The roadmap is the real issue
Taken together, the survey outlines the boundaries within which Canada’s auto strategy will succeed or fail.
Manufacturing location matters.
Prices cannot keep rising.
Public investment is expected to strengthen ecosystems, not just incumbents.
EVs and batteries sit at the centre of this transition, as the clearest test of whether Canada can align policy, capital, and execution.
The signals in the survey are consistent. Canadians expect vehicles they can afford, production that supports the domestic economy, and a transition to EVs that holds together in practice.
Delivering on all three is now the real test.
Final shots
• Manufacturing footprint has become part of competitive positioning, not a secondary consideration.
• Affordability is now a structural constraint shaping demand and investment decisions.
• EV leadership will depend on execution across supply chains, pricing, and infrastructure, not ambition alone.
Written ByJennifer Kervin
Jennifer Kervin is a Digital Journal staff writer and editor based in Toronto.
Photo by Getty Images on Unsplash Plus
Before Canadians start comparing prices, powertrains, or brand badges, they are sending a clear signal about the auto sector itself.
A new consumer automotive survey from KPMG Canada shows that 72% of Canadians say it is very or somewhat important that their vehicle is assembled or built in Canada.
That data point reframes the broader debate facing the industry.
Manufacturing footprint has become a proxy for trust, economic contribution, and long-term commitment when the sector is under pressure from trade uncertainty and rising costs.
“With U.S. tariffs disrupting the industry, Canadians in the market for a new vehicle are looking to the brands they trust at prices they can afford in models they want, and increasingly, on where those vehicles are built,” says Dave Power, partner and national automotive sector leader at KPMG in Canada.
Power points to Toyota and Honda, which both maintain large manufacturing operations in Ontario, as brands that continue to resonate with Canadian buyers. At the same time, trust in the Detroit Three appears to be eroding as Canadians perceive less commitment to keeping jobs in Canada amid U.S. trade pressures.
For business leaders and policymakers, the survey shows that manufacturing location, affordability, public investment, and EV ambition are increasingly tied together, narrowing the range of viable choices ahead.
That convergence becomes most visible when the conversation turns to price.
While manufacturing location has emerged as a trust marker, affordability remains the pressure point that exposes whether the system can hold. Survey data suggests Canadians are reaching the limits of what they are willing and able to absorb as costs rise across the automotive value chain.
Affordability is now a structural signal
Price still dominates decision-making, but the margin for error has narrowed.
Sixty-two percent of Canadians say they will not spend more than $50,000 on a new vehicle, down from 75% in KPMG’s 2022 survey.
Nearly three-quarters (76%) worry that ongoing trade tensions and tariffs will push prices even higher. Almost a quarter (23%) say tariffs have already priced them out of the new vehicle market, while another 38% say a further 10 to 15% increase would do the same.
For manufacturers and suppliers, rising costs tied to trade policy, supply chains, and production decisions are colliding with increasingly constrained willingness to pay, putting pressure on volume assumptions and long-term planning.
Subsidy expectations are shifting away from incumbents
One of the clearest signals in the survey is how Canadians believe public investment should be directed.
Only seven percent support continued subsidies for the Detroit Three (GM, Ford, and Stellantis).
Instead, 37% want funding directed toward Canada’s auto parts supply industry, and 58% support diversification into defence manufacturing as a way to protect jobs and build resilience.
“People want long-term strategy, not short-term patches,” says Power. “Canadians are calling for strategic investments that safeguard manufacturing jobs while strengthening the foundation for the entire automotive ecosystem.”
The implication is a shift from firm-specific support toward system-level capacity, challenging long-standing assumptions about how governments stabilize the sector and what success should look like.
Trade risk is shaping strategic decisions
With CUSMA set for review in 2026, 72% of respondents worry vehicle prices will rise if Canada loses protection under the agreement. Half (51%) believe Canada’s automotive industry cannot survive without trade protections or a new agreement with the U.S.
Joy Nott, partner in trade and customs at KPMG, says potential changes to rules of origin could force a restructuring of supply chains.
“If the CUSMA rules of origin change substantially to require even more North American content, this could have a dramatic impact on existing automotive supply chains,” she says. “This disruption would require a search for new North American suppliers to replace overseas manufacturing. While disruptive and likely to increase costs, this change could also create opportunities for Canadian manufacturers to expand and diversify their business.”
That uncertainty shows up in everyday decisions, like whether to expand a plant, lock in a supplier, or wait another year before committing capital.
EVs are the execution test, not the solution
More than half of Canadians (55%) believe the country could become a global leader in electric vehicles and battery production, and 52% want governments to make that a priority.
Governments have already committed billions toward that ambition.
The survey suggests support is conditional, with affordability a central concern and infrastructure and domestic supply chains top of mind.
Canadians are questioning whether the system can deliver them at scale and at a price that works, not rejecting the idea outright.
“With all the turmoil in the auto sector, Canada has a real opportunity to invest at home and diversify into EV battery production to protect jobs, attract investment, and build long-term resilience,” says Power.
“What’s needed is a clear roadmap to accelerate Canada’s leadership, bearing in mind that building affordable EVs will be essential, particularly to compete with lower-cost models from foreign manufacturers, as will significant investment in a robust charging infrastructure.”
The roadmap is the real issue
Taken together, the survey outlines the boundaries within which Canada’s auto strategy will succeed or fail.
Manufacturing location matters.
Prices cannot keep rising.
Public investment is expected to strengthen ecosystems, not just incumbents.
EVs and batteries sit at the centre of this transition, as the clearest test of whether Canada can align policy, capital, and execution.
The signals in the survey are consistent. Canadians expect vehicles they can afford, production that supports the domestic economy, and a transition to EVs that holds together in practice.
Delivering on all three is now the real test.
Final shots
• Manufacturing footprint has become part of competitive positioning, not a secondary consideration.
• Affordability is now a structural constraint shaping demand and investment decisions.
• EV leadership will depend on execution across supply chains, pricing, and infrastructure, not ambition alone.
Written ByJennifer Kervin
Jennifer Kervin is a Digital Journal staff writer and editor based in Toronto.
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