C-Suite 44th Quarterly Survey 2016

The 44th Quarterly C-Suite Survey
October 7, 2016
Sponsored by:
Published and
broadcast by:

2222
Introduction
 Methodology: telephone interviews with 157 C-level executives from
ROB1000-listed companies between September 7 & October 3, 2016.
 This quarter’s survey asked the C-Suite about:
 The state of the Canadian economy
 The implications of Brexit on Europe & Global Business
 Prime Minister Trudeau’s visit to China
 International trade including the Canada-China trade relationship
 Assessments of the new federal government’s performance at the 1-year mark

3333
Key Findings: Trade, Brexit
 Few in the C-Suite are very worried about “Brexit”. Most think there will be a somewhat
negative impact on the European economy as a result of the majority vote in Britain in
favour of leaving the EU few said the impact would be very negative.
 It’s important to note that North America and to a lesser extent Asia, are significantly
more important markets for most in the C-Suite than Europe. Few said Europe or the
UK was an important market for their business.
 While Brexit per se is not a top concern, the fate of Europe and political developments
more broadly are an important concern.
 A majority (57%) agreed it is likely that more states will vote to leave the EU in the near
future.
 Forty-two percent expect the political environment for business in Europe will worsen
over the next five years.
 Almost as many believe the political environment for business in the US will worsen over
the next five years. Some were unsure what to predict while 24% actually expect the
political situation to improve in the US.
 The key is that most of the C-Suite is very or somewhat worried about the implications of
politics on free trade and trade agreements. Executives are in fact more concerned about
this issue than about ongoing concerns around Europe’s banking system or a possible
correction in equities markets.

4444
Key Findings: China & Canada
 Much of the discussion about the recent visit by Prime Minister Trudeau to China
focused on the importance of a “reset” in Canada-China relations.
 While most agreed the trip was important, fewer agreed that the outcomes of the visit
alone were positive.
 Many do not think the Trudeau-Liberal government is better or worse off than the
Harper-Conservative government when it comes to advancing Canada-China relations.
 In fact, most are not worried about Canada’s competitiveness in the Chinese market.
 Most think relations with China have been about as good as could be expected for a
country like Canada.
 Most think Canada is doing somewhat well when it comes to trading with China; only
37% said it’s doing poorly.
 Most support pursuing a free trade agreement with China, with the caveat that there
should be limits on Chinese state-owned business investment in Canada’s strategic
assets.
 Another reason for the muted enthusiasm about Trudeau’s visit is the inherent division
of opinion in the C-Suite about his government. Many either approve of the
government’s performance or are indifferent to how it its performed at the one-year
mark. Roughly one in three strongly disapprove of the Trudeau government’s
performance to date. Fifty-three percent believe the government has met or exceeded
expectations, while 45% said the government has fallen short of expectations.

Brexit & Global Trade
 Few in the C-Suite are very worried about “Brexit”.
 One in ten believes the Brexit vote will have very negative repercussions for the European
economy; most think the impact be somewhat negative.
 When asked about the implications of Brexit for businesses globally, the C-
Suite was most likely to mention that it will have an impact on trading
patterns or mean global economic instability/uncertainty.
 One in four believes there will be no implications or impact on business
trends globally.
 It is important to note that only 17% said Europe is a very important
market for their business.
 Indeed Europe is less important to businesses than China (25% very important) and
significantly less important than the North American market (55% saying the US is very
important).
 Most agreed more states are likely to leave the EU in the near future.
5

6666
Impact of Brexit on European
Economy
In the referendum held last June the majority of Britons voted to leave the European
union. What impact will that decision have on the European economy?
4 18 63 10 4
0 20 40 60 80 100
Very positive Somewhat positive
Neither positive nor negative Somewhat negative
Very negative DK/ NR

7777
International Trade and the EU
I'm going to read a few statements about international trade, and I would like you to
tell me whether you strongly agree, somewhat agree, somewhat disagree or strongly
disagree with each.
16
8
41
34
27
45
13
11
3
2
0 50 100
It is likely that more states will
vote to leave the EU in the near
future
The Brexit vote and decision by
Britain to leave the EU makes
opening up trade between
Canada and Asia a more
important imperative than it
was before
Strongly agree Somewhat agree Somewhat disagree
Strongly disagree DK/ NR

8888
Global Implications of Brexit
16
13
11
10
4
4
4
3
1
25
4
0 10 20 30 40 50
Impact on trading patterns (creating barriers for
business/jobs, trade renegociations & reductions, etc.)
Global economic instability/uncertainty
Currency devaluation/ slowed economic growth &
international investment in britain
Growing trend of protectionism/isolationism/economic
nationalism
Positive impact (more oppertunity, flow of skilled workers,
reduce regulatory burdens, etc.)
Negative impact (general mention)
Too soon to say/depends on other factors
Mixed implications (some positive and negative aspects)
Other countries in the e.u. may also decide to leave
Negligible/ No impact
DK/ NR
What do you think are the implications for business globally following the British
vote to leave the EU?

9999
Expectations for Business
61
55
25
17
8
8
25
32
34
31
31
31
13
11
39
50
60
60
1
1
2
2
2
0 50 100
Canada
The US
China
Europe
India
Great Britain
Very important Somewhat important Not important DK/NR
Thinking about the next five years, how important are each of the following markets
to your business?

Brexit & Global Trade
 Forty-two percent expect the “political environment for business” will
worsen over the next five years in Europe.
 Thirty-eight percent expect the “political environment for business” in the
US will worsen over the next five years. Twenty-four percent actually
expect the political dynamic there will improve while some are unsure what
the next few years will hold.
 Most are very or somewhat worried about the implications of politics on
free trade and trade agreements.
 37% are very worried about the implications of politics on trade
 Fewer are very concerned about Europe’s banks (23%) or a potential correction in equities
markets (18%).
10

11111111
Economic Concerns
Now I'd like to ask how worried you are about various economic and business
issues. When it comes to...
37
23
18
11
13
12
46
52
50
55
48
38
12
22
25
26
31
31
4
4
6
8
7
19
1
1
1
0 50 100
The implications of politics on
free trade and trade agreements
Europe's financial and banking
system
A possible correction in North
American equities markets
The performance of the Chinese
economy
The performance of the US
economy
The decision by Britain to leave
the EU
Very worried Somewhat worried Not very worried
Not at all worried DK / NR

12121212
Looking Forward:
Political Environments for Business
Do you think the political environment for business in the United States/ Canada/
Europe will be better, worse, or no different over the next 5 years, compared to the
last 5 years?
42
38
38
43
24
31
12
24
28
3
14
3
0 50 100
Europe
US
Canada
Worse No different Better DK/ NR

Trudeau in China
 The vast majority said the Prime Minister’s trip to China was important.
 83% said the visit was very or somewhat important; 29% said PM Trudeau’s visit was very
important.
 Fewer (45%) said the outcome of the visit was positive, while 43% said the
impact was neither positive nor negative.
 The C-Suite is also divided on whether the Trudeau-Liberal government is
better positioned to advance relations with China than the Harper-
Conservative government.
 40% said it is, while 41% said it was neither better nor worse off than the previous government.
13

14141414
Trudeau in China
Canada's Prime Minister Justin Trudeau began an official visit to China at the end of
August. How important was this visit for Canada and its economy?
29 54 17
0 20 40 60 80 100

15151515
Impact of the Visit
How would you rate the progress achieved by the Prime Minister's visit to China,
based on what you have seen or read? Was it very or somewhat positive for Canada or
very or somewhat negative for Canada?
8
10
9
37
29
40
38
43
67
43
39
5
3
7
2
5
2
4
3
6
0 50 100
Total
Oil & Gas
Bank & Finance
Other
Very positive Somewhat positive
Neither positive nor negative Somewhat negative
Very negative DK/ NR

16161616
Current Position With China
Compared to the previous Conservative Harper government, do you believe the
Trudeau Liberal government is in a better position or a similar position or in a worse
position to engage with China and make progress in expanding trade relations?
40 41 15 5
0 20 40 60 80 100
Better position Similar position Worse position DK/NR

China & Canada
 Most in the C-Suite are not worried about the current state of the Canada-
China relationship:
 57% think relations with China over the last 3 years have been about as good as could be
expected for a country like Canada. Only 35% said relations have fallen short of what they would
expect.
 Forty-three agreed Canadian companies do about as well as comparable European or US
companies when it comes to doing business in China while 45% disagreed with this.
 Most think Canada is doing somewhat well when it comes to its trading relationship with China.
Only 37% said it’s doing poorly.
17

18181818
Expected Engagement with China
57
35
6
3
0 20 40 60 80 100
Been about as good as could be
expected for a country like Canada
Fallen far short of what you would
expect for a country like Canada
Far exceeded what you would expect
from a country like Canada
DK/ NR
Would you say the degree of engagement by Canadian governments with China over
the last three years has…

19191919
International Trade and Canada
I'm going to read a few statements about international trade, and I would like you to
tell me whether you strongly agree, somewhat agree, somewhat disagree or strongly
disagree with each.
8
6
4
38
37
22
40
38
45
10
8
27
4
11
1
0 50 100
Canadian political considerations will
prevent Prime Minister Trudeau from
making meaningful progress in
promoting trade with China
Canadian companies do about as well
as comparable European or US
companies when it comes to doing
business in the Chinese market
The slow down in China's economic
growth rate has made promoting
Canadian trade with that country less
of a priority than a decade ago
Strongly agree Somewhat agree Somewhat disagree
Strongly disagree DK/ NR

20202020
Canadian Trade Relations
27
11
5
1
3
50
56
54
58
32
18
25
30
36
32
3
1
2
1
5
1
6
10
4
28
0 50 100
The US
Europe
Asia
China
India
Very well Somewhat well Somewhat poorly
Very poorly DK / NR
Would you say Canada is doing very well, somewhat well, somewhat poorly, or very
poorly when it comes to its trading relationship with…?

China & Canada
 Most executives view China as an important market for their business over the next
five years.
 One-in-four see China as a very important market for their business. A larger
majority located in Western Canada sees it as an important market.
 The C-Suite certainly expects Canada to make significant progress in relations with
China:
 The vast majority strongly or somewhat support the idea of Canada negotiating a free trade
agreement with China over the next five years – only 14% are opposed.
 In a follow up question, however, 7 out of 10 said they support the Canadian government
continuing to place limits on the ability of Chinese State-owned enterprises to invest in strategic
Canadian industries such as the oil sands.
 The C-Suite believes a focus on free trade and bilateral trade resulting in better deals
for Canada should be top of mind for the Trudeau government’s dealings with China.
 Almost half expect that Canadian political considerations will prevent the
government from making meaningful progress in promoting trade with China.
21

22222222
Expectations for Business:
China
25
24
7
31
31
19
34
48
27
34
38
29
39
29
67
33
31
49
1
2
3
0 50 100
Total
Oil & Gas
Bank & Finance
Other
Western Canada
Rest of Canada
Thinking about the next five years, how important are each of the following markets
to your business: CHINA

23232323
Government Priorities With China
29
26
13
7
6
3
3
1
10
0 10 20 30 40 50
Free trade/increasing trade (general mention)
Focus on bilateral trade/getting a better deal for canada
(reciprocity of market access/tariffs, reduction of…
Human rights issues, workers rights
Promoting canada (good place to invest, great
goods/services/resources for import, etc.)
Foreign investments/ownership
Intellectual property & cyber security concerns
Foreign relations (focus on developing cultural
understanding, respecting differences and traditions, etc.)
Environmental/climate change policy
DK/ NR
What is the most important issue that you think Prime Minister Trudeau and his
government should be addressing in their ongoing engagement with the Chinese
government and its leadership?

24242424
Chinese Free Trade Agreements
Would you strongly support, somewhat support, somewhat oppose or strongly
oppose Canada seeking to negotiate and ratify a free trade agreement with China
within the next five years?
38 44 10 4 4
0 20 40 60 80 100
Strongly support Somewhat support Somewhat oppose
Strongly oppose DK/ NR

25252525
Chinese Foreign Investment
Would you strongly support, somewhat support, somewhat oppose or strongly
oppose the Canadian government continuing to place limits on the ability of Chinese
state owned enterprises to invest in strategic Canadian industries such as the
oilsands?
36 34 12 15 2
0 20 40 60 80 100
Strongly support Somewhat support Somewhat oppose
Strongly oppose DK/ NR

Approval of the Trudeau Government
 This October marked the one-year mark since the election of a new federal
Liberal government led by Prime Minister Trudeau.
 Fifty-three percent believe the government has met or exceeded
expectations, 45% said the government has fallen short of expectations.
 This division of opinion is not largely or necessarily new. In December 2015, 48% of the C-Suite
said the election of the new government was a somewhat negative development for business;
11% said it was a very negative development.
 This builds on research conducted last quarter that suggested while the government was
representing Canada well abroad the C-Suite was less likely to approve of the government’s
fiscal and energy policies.
 Twenty-three percent strongly approve of its performance at the 1-year
mark while 32% strongly disapproves.
 Western Canadian and oil-and-gas sector representatives are either indifferent to the
government’s achievements or strongly disapproving.
26

27272727
Trudeau Liberal Government
Performance
11
8
15
42
38
47
45
52
39
2
3
0 50 100
Total
Western Canada
Rest of Canada
Exceeded your expectations Met your expectations
Fallen short of your expectations DK/NR
The Trudeau Liberal government is nearing the 1-year mark since forming
government in the fall of 2015. Has the overall performance of the Trudeau Liberal
government...

28282828
Rating the Government’s
Performance
23
27
26
17
31
45
48
50
42
47
41
32
52
23
30
36
28
1
0 50 100
Total
Oil & Gas
Bank & Finance
Other
Western Canada
Rest of Canada
Approve (7-9) Neither approve or disapprove (4-6)
Disapprove (1-3) DK/NR
How would you rate the government's performance on a 1 to 9 scale with 1 meaning
you strongly disapprove and 9 meaning you strongly approve?

29292929
Expectations for Canadian
Environment
28
5
33
31
23
32
31
24
33
31
25
39
38
71
33
33
48
28
3
5
4
1
0 50 100
Total
Oil & Gas
Bank & Finance
Other
Western Canada
Rest of Canada
Better No Different Worse DK/NR
Do you think the political environment for business in Canada will be better, worse,
or no different over the next 5 years, compared to the last 5 years?

Biggest Challenges Facing Business
 One in three (33%) business leaders surveyed said current
market/economic conditions are the biggest challenge facing their
company right now.
 Every industry and sector said market/economic conditions are a top
challenge, but more than half of executives in the Oil & Gas industry (52%)
cited this.
 Regulatory hurdles and costs and access to capital funding are the second and third greatest
challenges for the C-Suite, especially for the those in the resource sector (19% and 17%,
respectively).
30

Economic Outlook
 Views of the Canadian economy remain modestly positive this quarter,
much as they were last quarter.
 That is still significantly improved from the outlook between June 2015 and
March 2016 inclusive, when most expected the Canadian economy to
contract.
 The C-Suite remains more optimistic about the US. Few are worried about
the possibility of a US recession. More however are at least somewhat
worried about a correction in US stock markets.
31

32323232
Company Challenges
What is the biggest challenge facing your company right now?
Total %
Sectors %
Oil & Gas
Bank &
Finance
Other Sectors
Market/economic conditions (fluctuations, dollar/exchange, price
of commodities, volatile pricing, uncertainty...) 33% 52% 33% 29%
Regulatory hurdles, cost/fees, consistency 14% 29% 20% 12%
Access to capital/financing, access/support, barriers/regulations to
capital 11% 5% 13% 12%
Opportunities for revenue/growth/capacity 10% N/A 13% 10%
Global uncertainty/conflicts 9% 10% 3% 10%
Recruitment/staffing (qualified, suitable labour, personel...) 7% N/A 10% 8%
Economy in western Canada/Alberta (specific mention) 4% N/A 7% 4%
Cost control, expense adjustments, operating risks 4% N/A 3% 6%
Competition, increased competition 3% N/A 7% 3%
Identifying/planning acquisition targets, access 2% N/A N/A 3%
Ability to keep up with rapid growth 1% N/A N/A 2%
Don’t know / No response 2% N/A N/A 1%

33333333
Company Challenges: Sectors
25
10
15
5
25
5
5
5
5
22
9
9
17
9
8
8
5
6
5
2
46
19
17
1
10
1
4
0
0 20 40
Market/economic conditions (fluctuations, dollar/exchange, price of
commodities, volatile pricing, uncertainty...)
Regulatory hurdles, cost/fees, consistency
Access to capital/financing, access/support, barriers/regulations to
capital
Opportunities for revenue/growth/capacity
Global uncertainty/conflicts
Recruitment/staffing (qualified, suitable labour, personnel...)
Economy in western Canada/Alberta (specific mention)
Cost control, expense adjustments, operating risks
Competition, increased competition
Identifying/planning acquisition targets, access
Ability to keep up with rapid growth
Manufacturing
Services
Resources
(incl. mines,
energy, oil/gas)
What is the biggest challenge facing your company right now?

34343434
Expectations of
the Canadian and US Economies
1
9
64
77
34
13
1 1
1
0 50 100
Canadian economy
US economy
Strong growth Moderate growth Moderate decline
Strong decline DK/NR
What are your expectations for the U.S. /Canadian economy over the next 12 months?

35353535
Expectations of
the Canadian Economy
1
1
64
43
63
68
34
57
37
28
1
1
1
2
0 50 100
Total
Oil & Gas
Bank & Finance
Other
Strong growth Moderate growth Moderate decline
Strong decline DK/NR
What are your expectations for the Canadian economy over the next 12 months?

36363636
Projections For The Canadian
Economy
What are your expectations for the Canadian economy over the next 12 months?
89
72
58
15
55
91 92 92 95
69
82
75
87
91 91
97
89
77
60
66
47 4543
70
64
10
28
40
85
45
8 7 8 5
29
16
20
12
9 9
3
10
24
39
33
53 53 56
30
34
0
20
40
60
80
100
120
Growth Decline

37373737
Projections for
The US Economy
86898689
93
9093
89
9495
9092918986
6768
72
51
33
71
61
50
70
6668
55
4
22
13111411
7
10710
64
898
10
13
312927
47
67
28
38
50
313230
45
96
76
0
20
40
60
80
100
120
Growth Decline
What are your expectations for the U.S. economy over the next 12 months?

27
19
21
24
24
24
42
58
58
58
51
55
64
50
13
20
19
22
18
10
8
1
1
1
1
1
2
1
3
0 20 40 60 80 100
Q2 2016
Q1 2016
Q4 2015
Q3 2015
Q2 Oil/gas, energy, resources
Q2 Services
Q2 Manufacturing
Strong Growth Moderate growth Moderate decline
Strong decline Don't Know
38383838
Jun. 2016 Outlook for Business
What are your expectations for your company over the next 12 months, strong
growth, moderate growth, moderate decline, strong decline?

28
27
19
21
24
24
12
61
58
58
58
51
67
43
10
13
20
19
22
10
39
1
1
1
1
1
1
2
1
3
4
0 50 100
Q3 2016
Q2 2016
Q1 2016
Q4 2015
Q3 2015
Q3 2016 Resources, Oil/gas, energy
Q3 2015 Resources, Oil/gas, energy
Strong Growth Moderate growth Moderate decline
Strong decline Don't Know
39393939
Sept. 2016 Outlook for Business
What are your expectations for your company over the next 12 months, strong
growth, moderate growth, moderate decline, strong decline?

C-Suite 44th Quarterly Survey 2016

Recommended

Recommended

More Related Content

What's hot

What's hot (20)

Similar to C-Suite 44th Quarterly Survey 2016

Similar to C-Suite 44th Quarterly Survey 2016 (20)

More from The Gandalf Group

More from The Gandalf Group (16)

Recently uploaded

Recently uploaded (20)

C-Suite 44th Quarterly Survey 2016