Part 2 – Betting on Canada: Capital for Manufacturers Ready to Invest Through Uncertainty

By Hai Tran-Viet, Co-Managing Partner, CBGF

In Part 1, Dale Tingley examined how owners can plan a transition on their own terms. The more immediate question is whether to keep investing during an uncertain environment. Canadian manufacturing is caught in a paradox: the moment calls for investment in automation, new markets, and resilient supply chains, yet many companies are pulling back. KPMG’s 2026 survey found more than half of Canadian manufacturers have reduced, paused, or cancelled capital spending, and roughly half describe their posture as “endurance mode”. Roughly four in ten have moved or plan to move production to the U.S., most within two years.

Endurance mode is understandable, and it’s a sentiment we hear from many owners. Tariff volatility, a wavering CUSMA outlook, and a widening cost gap with the U.S. have made near-term planning difficult. But an extended holding pattern has its own cost: aging equipment, slowing productivity, and capabilities that gradually shift elsewhere while companies wait for clarity that may not arrive on a predictable timeline.

The real constraint usually isn’t willingness; it’s finding the right capital partner

Most owners we speak with don’t lack the ambition to modernize. Many are understandably reluctant to put more of their own capital at risk, and lack a capital partner suited to the moment. Bank debt remains an important tool, but its repayment terms can be restrictive for growth investment in volatile periods. Traditional private equity typically buys a control stake (up to 100%) and sells within three to five years to meet fund return targets, which can be a mismatch for owners navigating a multi-year trade environment on their own terms. Many strong businesses are left on the sidelines when investing could matter most.

CBGF’s model was built to provide this alternative, and it’s the conversation I have most often with founders today. We are an evergreen fund with $545 million in commitments from Canada’s leading banks and insurance companies, providing patient minority capital (targeting $10 million to $20 million per investment) to ambitious mid-market Canadian businesses. Owners retain control, can take some cash off the table to reduce personal risk, and gain an experienced partner to help fund the next stage of growth. Our evergreen structure also means any future exit can be timed to the owner’s objectives, giving companies the flexibility to invest through uncertainty, not around it.

What that capital can do right now

Today, patient capital can fund the moves that strengthen a company’s position: automation and robotics that improve margins regardless of where a plant sits, diversification into new markets that reduces reliance on a single trade relationship, and supply chain investments that build resilience against the next disruption, not just the current one. It can also support a deliberate decision about a company’s Canadian and U.S. production footprint, rather than a reactive one driven by short-term cost pressure alone. Beyond capital, an experienced investor can help management evaluate these decisions and, as Dale outlined in Part 1, plan for the owner’s longer-term succession objectives.

Manufacturing has historically rewarded those who invest ahead of the cycle, not behind it. The companies that use this period to strengthen their operations, rather than simply defend them, will be best positioned to compete when conditions stabilize.

A partner for the long game

Canada’s manufacturers built this country’s industrial base through innovation, patience and reinvestment. That instinct hasn’t disappeared; it just needs a capital partner willing to match it. If you’re weighing a significant investment in your business over the next few years, we’d welcome the conversation.

Hai Tran-Viet is Co-Managing Partner at CBGF, leading the Fund’s strategic direction and playing an active role in transaction origination, execution, and portfolio management. He brings over 20 years of experience in private equity and investment banking, previously with TD Capital and CIBC Capital Markets. Hai holds an MBA from Columbia and is a CFA charterholder.

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The Canadian Business Growth Fund provides long-term, patient, minority capital to ambitious entrepreneurs leading established Canadian mid-market businesses.

References

KPMG Canada, “Canadian manufacturing at a crossroads” (August 13, 2026), citing the KPMG Canada Manufacturing Survey (275 companies, via Angus Reid Group, May 11–29, 2026): https://kpmg.com/ca/en/insights/2026/08/canadian-manufacturing-at-a-crossroads.html

KPMG Canada, “Four in 10 Canadian manufacturers eye U.S. production move” (July 7, 2026): https://kpmg.com/ca/en/media/2026/07/canadian-manufacturers-eye-us-production-move.html