Canadian executives are more confident than they’ve been in nearly three years amid stabilizing oil prices, a rebound in domestic economic growth and expectations U.S. President Donald Trump’s policies will be positive for business.
In BNN’s quarterly C-Suite Survey, conducted by KPMG, 92 per cent of the 157 executives polled from Feb. 27 to March 24 said they expected their firm to post either strong or moderate growth over the next year. And 88 per cent expect Canadian economic growth over the next 12 months -- the strongest vote of confidence since October 2014.
Executives in the services sector cited changes to U.S. corporate and personal tax rates, deregulation and reduction of government bureaucracy and Trump’s pro-business stance as the largest sources of optimism. In contrast, changes to the U.S. tax code encouraged only seven per cent of respondents from the resource sector, who are much more encouraged by the U.S. president’s support for pipelines and the subsequent expectations for stronger commodity prices, along with investments in infrastructure.
Despite their optimism Trump’s policies will be pro-business, Canadian executives are taking an ambivalent view of the newly-minted president. Only nine per cent of respondents expressed a positive view of Trump, despite seven of every 10 believing their business will benefit from his policies and direction. Executives are taking a particularly dim view of Trump’s trade policy, with 62 per cent saying he’s done a poor job thus far.
Of particular concern on the trade front is the specter of restrictive trade policies, including the renegotiation of the North American Free Trade Agreement and a possible border adjustment tax. Nearly four of every 10 executives in the services sector cite NAFTA renegotiations as the biggest threat to their business, while the BAT is top of mind for the resources sector.
However, the C-Suite is urging Prime Minister Justin Trudeau to avoid poking the bear: only 35 per cent of respondents say Parliament Hill should speak out against the president when he violates values important to Canada.
Indeed, Trump’s ascension to the White House is prompting executives to call for Canada to take some of its eggs out of the American basket, with more than one-half of respondents saying Canada should prioritize new trade agreements in the Asia-Pacific region at least as much as U.S. trade talks.
But many believe they may not have to deal with him for long: 30 per cent say it’s unlikely Trump fulfills his term.