Officials in Mexico have expressed growing frustration with the cost and regulatory complexity faced by Mexican firms seeking to operate in Canada, according to a report issued by Mexico’s embassy in Ottawa. The report, released late December, characterizes interactions with Canadian federal and provincial regulators as laden with excessive administrative demands and high costs, deterring potential investment by Mexican companies across multiple sectors. The embassy account describes conversations with executives from Mexican enterprises in industries including construction, financial services, food processing and real estate, noting that many were dissuaded from establishing operations in Canada because of onerous bureaucratic procedures and associated expenses.

The embassy report highlights what it describes as substantial “red tape,” a term commonly used in trade and business circles to refer to regulatory and procedural requirements that impose significant time and financial burdens on firms. Regulatory complexity can arise from overlapping federal and provincial jurisdictions in Canada, where different standards and licensing obligations may apply across regions. Estimates from independent business surveys have previously documented that compliance with government regulations in Canada imposes measurable costs on both domestic and foreign firms, a factor that can influence investment decisions and the pace of market entry.

Mexican diplomats underscored that in some cases, even obtaining basic operational data from Canadian authorities presented challenges, adding to firms’ perceptions of an unfriendly investment climate. These accounts contrast with public statements from Canadian leaders earlier in 2025 celebrating strengthened cooperation with Mexico. Prime Minister Mark Carney had described a “new era of cooperation” between Ottawa and Mexico City, emphasizing shared economic priorities and mutual interest in enhancing trade and investment flows.

Canadian business groups and trade analysts have for years voiced similar concerns about the complexity of doing business across provincial and national borders, citing regulatory fragmentation and administrative costs as impediments to trade expansion. More recent surveys of Canadian business leaders have found that concerns about tariffs and market access, especially for exports to the United States and Mexico, rank high among risk factors for future growth, even as firms try to leverage the benefits of the USMCA framework.

Mexico’s embassy report underscores that, while formal trade agreements have reduced tariff barriers and established legal frameworks for cross-border commerce, procedural and regulatory issues at the national and subnational levels remain significant considerations for firms evaluating international expansion.