Skip to main content
Marsh logo

Article

One year of Bill C-5: Impacts on Canadian manufacturers

One year of Bill C-5: What Canadian manufacturers must do before the CUSMA review — supply chain, tariffs, labour mobility, and national projects.

06/18/2026 · 7 minute read

Bill C-5, the One Canadian Economy Act, received Royal Assent on June 26, 2025, marking a period of unprecedented volatility for Canadian manufacturers. With the first anniversary on the horizon and the CUSMA joint review weeks away, this is a timely moment to take stock of what the legislation has delivered, where friction remains, and how manufacturers should be positioning themselves for the next 12 months.

A quick refresher on what the Act does

Bill C-5 has two distinct halves. The Free Trade and Labour Mobility in Canada Act creates a federal mutual recognition framework: a good or service that meets the rules of its home province is automatically deemed to meet equivalent federal standards, and federally regulated employers must recognize provincial licences and credentials. The Building Canada Act sits alongside it, giving Cabinet the authority to designate “national interest” projects and compress federal decision timelines from roughly five years to two. A purpose-built Major Projects Office has been established in Ottawa to coordinate approvals, financing and Indigenous partnership across provinces, territories, and rights-holders.

Year one: real progress, uneven impact

The trade and labour mobility provisions came into force on January 1, 2026, and the early indicators are encouraging for multi-provincial manufacturers. Middle market organizations with operations in two or more provinces are reporting fewer duplicate inspections, faster credential recognition for skilled trades, and lower compliance overhead — meaningful relief for an industry where labour scarcity remains a top five risk.

On the project side, the federal government announced an initial set of National Interest Projects in September 2025, including LNG Canada Phase 2, the Darlington New Nuclear Project, the Port of Montréal – Contrecœur container terminal expansion, the McIlvenna Bay Foran copper development, and the Red Chris mine expansion. The federal government also doubled the Indigenous Loan Guarantee Program from $5 billion to $10 billion to support equity participation. For manufacturers in fabrication, modular construction, critical minerals processing, marine and rail equipment, electrical systems and industrial automation, these designations are creating a domestic pipeline of work at a time when external demand is uncertain.

That said, year one has not been an unalloyed boom. Statistics Canada and Bank of Canada surveys point to softer manufacturing output in Ontario and Quebec, with provincial growth tracking near 0.9% for 2026. The 50% US tariffs on steel and aluminum introduced in mid-2025 remain a material headwind for many supply chains. Capital investment plans have increased only modestly and spending remains cautious. Bill C-5 improves the domestic backdrop and created near-term opportunities, but the impact is likely limited in the short term and cannot fully offset broader macroeconomic and trade pressures.

All in all, as of early 2026, the manufacturing sector in Canada has performed better than originally expected, but the pressure is mounting. The broader concern is less about immediate contraction but more about uncertainty becoming embedded into planning and investment cycles. Now is the time to consider resilience efforts to help maintain momentum and avoid interruptions in the face of any potential future tailwinds.  

What manufacturers should be doing now

Year one has shown that the manufacturers benefiting most from C-5 are those who treated it as an operational program, not a policy headline. With the CUSMA review approaching, here are eight ways to help protect your bottom line:

Re-examine classifications, content thresholds, and assembly footprints with customs counsel; quantify the value of CUSMA certifications you currently use; and pressure test eligibility for duty drawback, foreign trade zones, and bonded warehousing. Even small shifts in regional value content or country-of-origin documentation can materially reduce landed cost under the current tariff regimes.

Build a qualified bench of secondary suppliers — ideally split between Canadian, US, and CUSMA-compliant Mexican sources — and stress test it against tighter US-content rules of origin. Map your true single points of failure, not just your top-spend vendors, and add supplier financial health monitoring to avoid tariff-induced upstream insolvencies that could halt production.

Tier 1 visibility may no longer be enough. Use supply chain mapping platforms such as Marsh’s Sentrisk or equivalent tools to map Tier 2 and Tier 3 dependencies, geocode them against geopolitical and natural catastrophe risk, and feed the output into your contingent business interruption modelling. Revisit inventory strategy, such as safety stock, decoupling points, and strategic stocking locations, to balance working capital and resilience. Boards are increasingly asking for this view, and underwriters are rewarding it at renewal.

Fast‑tracked national interest projects can change how surety, builders’ risk, marine cargo, contract works, and environmental impairment coverages respond. Compressed approval timelines can shorten mobilization windows, increase concurrent capital projects, and heighten scrutiny on aggregate limits, owner-controlled programs, and project-specific delay-in-start-up wordings. Engage your insurance broker early — ideally before the engineering, procurement and construction (EPC) contract is finalized — to align policy wording, limits, retentions, and aggregate capacity with expected project scope and contractor arrangements.

Refresh your standard supply, distribution, and EPC templates with the post-2025 reality in mind: tariff pass-through and price adjustment clauses, change-in-law triggers, force majeure language that explicitly addresses tariffs and export controls, currency fluctuation mechanisms, and clear allocation of liability for compliance failures under CUSMA rules of origin. Many standard agreements still pre-date 2025 and were not designed with this environment in mind.

The mutual-recognition framework that came into force on January 1 finally makes it practical to deploy skilled trades across provincial lines without redundant licensing. Use it to harmonize benefits, payroll and group plans across multi-province operations, revisit workers’ compensation classifications, and review employment practices and employer’s liability coverages to confirm territory definitions, limits, retentions, and defence arrangements explicitly cover multi‑jurisdictional assignments and potential wrongful employment or misclassification exposures as workforce mobility increases. 

National interest projects are accelerating informational; and operational technology (IT/OT) convergence across manufacturing and aligned sectors. The rapid adoption of industrial AI and automation on the shop floor is amplifying risk exposures. Reassess cyber insurance limits and sub-limits for industrial control systems, validate incident response retainers that can support both IT and OT incidents, and confirm that contingent and non-physical damage business interruption is explicitly addressed in the policy wording. Operationally, prioritize asset inventories, IT/OT network segmentation, secure AI/automation governance (data integrity, change control and model management), timely patching and hardened remote access, and third‑party risk reviews of integrators and control‑system vendors. Run joint IT/OT tabletop exercises and supplier‑impact scenario modelling so insurance, response plans, and recovery timelines align with the faster pace of automation.

Engage proactively in industry advocacy, through trade associations and policy consultations, to influence CUSMA outcomes, permitting, and sector support. Simultaneously, pursue strategic partnerships (joint ventures, offtake agreements, Indigenous partnerships, and technology alliances) and evaluate business diversification into growth areas aligned with federal and provincial initiatives, like Canada’s Defence Industrial Strategy, Buy Canadian movement, and nation-building projects. These steps can help secure inputs, de‑risk projects, capture local opportunities from national interest designations, and position your business for new, policy‑backed demand.

None of these measures are new in isolation; what has changed is the speed and effort required to coordinate them. 12 months ago, manufacturers had time to phase this work. With the anticipated CUSMA review weeks away, that runway is rapidly narrowing.

Looking ahead and bracing for the CUSMA joint review

The next 12 months will likely bring a second tranche of national interest project designations, more granular Major Projects Office guidance, and continued interprovincial harmonization. Manufacturers aligned with critical minerals, infrastructure, energy and power, and their suppliers in fabrication, automation, and construction are more likely to see accelerated order flow from these projects.

However, the dominant variable remains the CUSMA joint review on July 1. This is the agreement’s first scheduled six-year check-in, and the US has signalled that automotive rules of origin, supply management, digital trade, procurement, and a range of non-tariff measures are all on the table. The three parties face a binary-plus-one choice: renew CUSMA for another sixteen years, allow rolling annual extensions to 2036, or begin unwinding it altogether. Canadian economists have called this the single most consequential macro variable facing the Canadian economy this year.

The bottom line

Bill C-5 has created a meaningful domestic tailwind for Canadian manufacturers, but its durability will be decided in the CUSMA review. Regardless of the outcome in July, the manufacturers best positioned to come out ahead may be the ones who have already mapped their supplier exposures, stress-tested tariff scenarios down to the stock keeping unit level, and aligned risk management and insurance programs to the specific projects they intend to bid on.

If you would like to compare notes on what we are seeing across the Canadian manufacturing book — from C-5 project pipelines to CUSMA-driven tariff and supply chain scenarios — get in touch with a Marsh representative.

Our people

Falak Kothari

Falak Kothari

Manufacturing Industry Leader, Marsh Risk Canada

  • Canada

Related insights

Placeholder Image

Article

Cyber risk in manufacturing: Navigating emerging threats and building resilience

04/23/2026
Production line of automobile plant, paint shop, conveyor. Finished product

Webcast

Cyber threats in manufacturing: Insights, challenges, and solutions

03/13/2026
Corporate business team and manager in a meeting

Podcast

Risk in Context Podcast: Building manufacturing resilience amid evolving trade agreements

02/10/2026
Cover of Marsh's report on Trade policy outlook for North American manufacturing — Preparing for the USMCA 2026 joint review

Report,Featured insight

Trade policy outlook for North American manufacturing

09/12/2025
View more