The survey asked C-suite executives about trade policy, NAFTA, monetary policy and the Trump administration. Key findings include: 1) Opinion of Trump's performance has worsened, and most expect major NAFTA changes. 2) Executives want Canada to resolve trade disputes through negotiation, not retaliation. 3) They are concerned about politics impacting trade more than domestic economic issues. 4) Few see a strong case for interest rate increases, and many are comfortable with a lower Canadian dollar.

1. The 47th Quarterly C-Suite Survey
Trade, Currency & Monetary Policy:
Uncertainty for North America’s Economy
June 23, 2017
Sponsored by:
Published and
broadcast by:

2. 2222
Introduction
 Methodology: telephone interviews with 150 C-level executives from
ROB1000-listed companies between May 16 & June 12, 2017.
 This quarter’s survey asked the C-Suite about:
 Trade Policy, NAFTA, Softwood
 The Trump Administration in its 2nd quarter
 Monetary Policy, Interest Rates, the Canadian Dollar

3. 3333
Key Findings
 Opinion about President Trump’s performance has worsened over the past quarter.
Many now expect his Administration will make major changes to NAFTA – 3 in 4 think
this is at least somewhat likely.
 Most want Canada to resolve disputes such as softwood lumber through negotiation or
trade tribunals. Fundamentally, they want to improve the bilateral trading relationship.
 They are less inclined to take steps that might open a trade war. They are open to
negotiations that might see Canada’s agricultural marketing boards dismantled if it
would either expand access or reduce irritants in long standing trade irritants.
 While recent economic data may point to a stronger economy and a potential interest
rate hike, the C-Suite is less bullish. Their view of the US economy is has softened
somewhat this quarter. They are far more concerned about politics impacting trade than
they are about Canadian lending or mortgage issues.
 Perhaps as a result of concerns they have about trade and the economy, few see a strong
case for interest rate increases and many are comfortable with a lower Canadian
currency, trading at 70 to 75 cents US.

4. 4444
Trump & Trade
 Most in the C-Suite now give President Trump a poor performance rating.
Much of their criticism relates to his effectiveness and leadership or focus.
 Yet there is also concern about Administration policy. Last quarter, 48% of the
C-Suite felt his Administration had done well on economic policy. This
quarter, half as many rated his Administration as doing well in this area.
 Most believe Canada stands to gain at least somewhat in terms of its ability to
attract skilled talent given the politics surrounding immigration in the US.
 There is growing concern among Canadian companies about the implications
of politics on trade.
 Many now expect President Trump will make major changes to NAFTA – 3 in 4 think
this is at least somewhat likely.
 Concern about trade is substantially greater than concern about Canadian housing or
mortgage markets. Last quarter 26% were very worried about the implications of
politics on trade – now 42% said they were very worried about this.

5. 5555
Assessing Trump’s Performance
27%
17%
15%
11%
9%
8%
5%
3%
1%
Inconsistency, unpredictability, recklessness
(both in policies & leadership style)
Unqualified, incompetent, lack of political
understanding
Ineffective implementation of plans, inability
to enact change, lack of accomplishment
Isolationist standpoint, negative for trade,
global/foreign policy
Conduct unbecoming (arrogant,
confrontational, reactionary, etc.)
Other positives (strong resolve, keeping
election promises, making change, etc.)
Policies are having a positive impact on the
economy
Too early to tell, mixed reviews (general
mention)
Not doing well overall (general mention)
What is the primary reason you gave him that rating? (Open ended)

6. 6666
Assessing Trump’s Performance
9%
5%
50%
30%
39%
63%
3%
1%
March, 2017
May & June 2017
Good (7-9) Moderate (4-6) Poor (1-3) DK- N/A
On a scale of one to nine where one is very poor and nine is excellent, how would you
rate the performance of President Donald Trump since the start of 2017?

7. 7777
Trump Administration’s Performance
24%
8%
7%
5%
3%
28%
18%
30%
16%
19%
46%
72%
62%
78%
75%
3%
2%
0%
1%
2%
Economic policy
Foreign policy
Canada-US relations
Immigration and refugee policy
Trade policy
Well Neither well nor poorly Poorly DK - N/A
Since the inauguration of President Trump on January 20th, would you say that he
and his administration are performing well or poorly, when it comes to
__________?

8. 8888
Economic Concerns
42%
12%
11%
11%
6%
6%
46%
54%
40%
42%
38%
37%
7%
21%
30%
31%
38%
40%
5%
13%
18%
16%
17%
17%
The implications of politics on
trade and trade agreements
Canada's real estate market
The price of oil
Labour supply & skills shortages
The stability of Canada's
mortgage lending industry
The Canadian dollar
Very worried Somewhat worried Not very worried
Not at all worried DK/NR
Now I'd like to ask how worried you are about various economic and business issues.
Would you say you are very worried, somewhat worried, not very worried or not at all
worried about ...?

9. 9999
Changes To NAFTA Likely
29%
37%
30%
29%
42%
47%
44%
31%
17%
12%
21%
28%
10%
4%
3%
12%
2%
2%
1%
May 2017 - Make only tweaks to NAFTA as
it impacts Canada
March 2017 - Make only tweaks to NAFTA
as it impacts Canada
May 2017 - Make major changes to NAFTA
as it relates to both Canada and Mexico
March 2017 - Make major changes to
NAFTA as it relates to both Canada and
Mexico
Very likely Somewhat likely Not very likely
Not at all likely DK - N/A
Would you say it's very likely, somewhat likely, not very likely or not at all likely that
President Trump's administration will…
…make only tweaks to NAFTA as it impacts Canada ?
…make major changes to NAFTA as it relates to both Canada & Mexico?

10. 10101010
Trade & Migration Concerns
23% 51% 12% 9% 5%Total
Strongly agree Somewhat agree
Neither agree nor disagree Somewhat disagree
Strongly disagree DK - N/A
Would you agree or disagree that Canada stands to improve its ability to
attract skilled talent away from the United States because of events
relating to immigration and domestic politics in the US?

11. 11111111
Canada’s Trade Options
 There is clear majority agreement that the government should protect Canada’s
softwood lumber industry. The preference is for defending the industry before trade
panels or in negotiations with the US. There is less consensus around retaliation.
 Just over half agreed Canada should retaliate against US duties on lumber by imposing
a tax on US thermal coal. However, many oppose this – 4 in 10.
 In a forced choice, the vast majority preferred that Canada respond by means of
negotiation and trade tribunals rather than signal an intention to retaliate against US
tariffs.
 A clear majority supports the idea of offering to phase out Canada’s supply managed
dairy system as a concession if it would help gain better market access for Canadian
exporters to the US.
 While some want to preserve the access Canada has or in fact increase access for
Canadian goods and services to the US market, many in the C-Suite believe it’s time to
tackle existing trade irritants, including addressing US complaints about marketing
boards or improving dispute resolution mechanisms.

12. 12121212
Canada’s Trade Options
54%
30%
23%
21%
33%
46%
35%
38%
7%
12%
26%
24%
3%
6%
13%
17%
3%
5%
3%
1%
Protecting Canadian softwood lumber interests by
fighting recent duties imposed by the US and defending
the industry before trade dispute panels
Seeking better market access from the US for
Canadian goods by offering to phase out Canada’s
protected dairy supply management system
Retaliating against US duties imposed on Canadian
softwood lumber by imposing taxes or limits on
exports of thermal coal from Canada to the US
Implementing a “Buy-Canadian” government
procurement policy in the event that the United States
implements “Buy American” provisions that prevent
procurement contracts going to Canadian firms
Strongly support Somewhat support Somewhat oppose
Strongly oppose DK- N/A
I'm going to read some approaches to Canada-US trade that the government of Canada could
implement and I’d like to know if you support or oppose each.

13. 13131313
Negotiation/Diplomacy
vs. Retaliation
2%
13%
85%
Canadian government should
negotiate, work through tribunals
Canadian government should signal
its willingness to retaliate to any
duties/tarriffs with an in-kind
response
Unsure
Some/other people say the Canadian government should diplomatically negotiate with the US
and work through dispute panels to get it to reverse course on tariffs and avoid an escalation
of tariffs on both sides.
Other/some people say the Canadian government should demonstrate its willingness to
retaliate to any duties and tariffs the US imposes with an in-kind response against US goods.
Which of those is closer to your own view?

14. 14141414
NAFTA Priorities
24%
9%
8%
7%
7%
7%
7%
4%
4%
4%
3%
3%
3%
3%
3%
2%
2%
Find a solution to softwood lumber issues
Maintain status quo
Broadening/improving access for manfactured goods/services
Fewer tariffs & barriers, improve access for goods & services
Improve dispute resolution/arbitration process
Greater mobility of people/talent between borders
Find a solution to dairy issues
Pipelines, export of oil & gas
Agriculture/agricutural products
Supply management & marketing boards (unspecified sectors)
Automotive sector protections
Improvements in natural resources trade (unspecified sectors)
Streamlining/improving border crossing process
Better communication, clarity & care given to discussions
Energy trade (general mention)
Reducing protectionism on both sides
Changes should center around Mexico, not Canada
Assuming that NAFTA and Canada-US trade could be improved in the interest of either country, what aspects
of NAFTA and the Canada-US trading relationship would you most want to see adjusted or improved?

15. 15151515
Bilateral/Trilateral FTA
TPP & FTA w. China
 Should the US withdraw from NAFTA, there is a preference for Canada to enter
negotiations towards a bilateral deal with the US rather than a trilateral deal with
Mexico.
 Most would support an effort by the Government of Canada to pursue free trade with
China, or to join other signatory countries to the Trans Pacific Partnership and
implement a similar trade agreement even without the involvement of the US. Nearly
half believes this should be a top priority for Canada’s government.

16. 16161616
Post-NAFTA – Trilateral or Bilateral
36%
58%
5%
TRILATERAL trade deal with
the US and Mexico
BILATERAL trade deal
negotiated with the US
DK - N/A
If the US administration revoked NAFTA, would you prefer that Canada joined
negotiations towards a new:

17. 17171717
Half Believe TPP & Free Trade with
China Should be High Priorities
“Last year negotiations were completed on the Trans Pacific Partnership trade agreement or TPP
between Canada, the US, Mexico, Japan, Australia and 7 others. This year President Trump withdrew the
US as a signatory to the TPP.
How much of a priority should it be for the government of Canada to work with the other 10 TPP
signatories to negotiate and implement a similar trade agreement between those nations without the
involvement of the US?” (Scale of 1 to 10, 1 = not at all a priority & 10 = highest priority.)
46%
45%
45%
41%
9%
12%
0%
2%
TPP
FT China
Very high priority (8-10) Moderate priority (4-7)
Not a priority (1-3) DK/NR
On a similar scale, how much of a priority should it be for the government of Canada to negotiate and
implement a free trade agreement with China? Please tell me on a scale of 1 to 10, with 1 being not at all a
priority and 10 being the highest priority.

18. 18181818
The Economy & the Canadian $
 Opinion about Trump and concern about trade agreements may explain a leveling off in
expectations for the economy this quarter, following two successive improvements in the
C-Suite’s forecasts.
 Despite positive jobs & GDP reports from Statistics Canada recently, the outlook is
cautious – few appear to have improved their forecasts.
 The outlook for the US economy has actually softened since last quarter when roughly 4 in 10
expected the US to post strong economic growth. Now, only 2 in 10 expect strong economic growth.
 The outlook for Canada’s economy is stable, with no significant shift since last quarter following
incremental improvement over the course of 2016. The vast majority expect modest growth.
 The C-Suite’s outlook for businesses is more positive but unchanged over the last three
quarters but still up significantly from 18 months ago.
 About a third expect strong growth, most expect moderate growth. Many cite concern about geo-
politics or trade disputes and to a lesser extent global markets as a key business concern.

19. 19191919
Canadian & US Economic Forecasts
3%
18%
83%
74%
13%
6%
1%
0%
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?

20. 20202020
US Economic Outlook
18%
40%
24%
9%
74%
58%
70%
77%
6%
2%
6%
13%
Q2 2017
Q1 2017
Q4 2016
Q3 2016
Strong growth Moderate growth Moderate decline
Strong decline DK/NR
What are your expectations for the U.S. economy over the next 12 months?

21. 21212121
Expectations For
Business
34%
34%
32%
28%
27%
19%
21%
55%
58%
57%
61%
58%
58%
58%
9%
4%
9%
10%
13%
20%
19%
0%
1%
1%
1%
1%
1%
1%
2%
3%
1%
0%
0%
2%
1%
Q2 2017
Q1 2017
Q4 2016
Q3 2016
Q2 2016
Q1 2016
Q4 2015
Strong growth Moderate growth Moderate decline
Strong decline DK/NR
What are your expectations for your company over the next 12 months?

22. 22222222
Challenges Facing Business
22%
20%
14%
10%
8%
8%
5%
2%
2%
2%
1%
Geo-political factors, politically driven
globaleconomic factors, uncertainty
Market/commodity prices, market
values/stability
Government regulations/permitting delays,
over-regulation/interference
Competition
Economic growth or lack there of, volatility in
the economy
Labour issues, shortage of qualified workers
Trade/NAFTA concerns and issues (mainly
with US, soft wood lumber...)
Access to capital/funds/equity
Managing growth of the company
Infrastructure/capacity for oil and gas market
Replenishing mining reserves
And what would you say is the biggest challenge facing your business right now?

23. 23232323
Interest Rates & the Canadian $
 There is a fair degree of comfort with Canadian monetary policy.
 Most said their businesses are planning on the Canadian dollar remaining at a valuation
of 70 to 75¢ US over the near- to medium-term.
 Fewer (1 in 5) expect the dollar will rise to above 75¢ US.
 Almost none are planning on the dollar going below 70¢ US.
 Yet few would be concerned if the dollar did dip to 70¢ US this year.
 Most said the impact on their companies would be positive or neutral.
 Just over half said the impact would be somewhat positive for Canada’s economy as a whole and 7 in
10 said it would be positive for Canadian exports. Few see any downside for Canada’s trade
prospects should the dollar drop further to 70¢ US (despite the US Administration’s expressed
concerns regarding trade balances & deficits).
 The C-Suite would be more concerned about a rise in interest rates and the potentially
negative impact that would have on access to capital and financing.
 Most said a rate increase by the Bank of Canada would have at least a somewhat negative impact on
the economy.
 About 1 in 3 said it would have at least a somewhat negative impact on their companies.

24. 24242424
A Rate Increase & the Economy
1%
2%
5%
6%
7%
20%
22%
23%
58%
57%
53%
15%
13%
14%
1%
2%
Total
West
Ontario
Very Positive Somewhat Positive No change
Somewhat negative Very negative DN/NR
If the Bank of Canada raised interest rates would the net impact on THE ECONOMY
be positive, negative, or neutral?

25. 25252525
Interest Rates
15%
12%
26%
7%
12%
20%
16%
0%
32%
4%
48%
50%
35%
53%
56%
46%
29%
62%
33%
55%
38%
38%
40%
40%
32%
34%
55%
38%
35%
40%
Total
West
ON
ROC
1-200
201-1000
1000+
Manuf.
Serv.
Res.
Very/somewhat positive Neutral Very/somewhat negative
If the Bank of Canada raised interest rates would the net impact on YOUR COMPANY
be positive, negative, or neutral? Is that very or somewhat ___?

26. 26262626
Rate Increase Impacts
41%
27%
18%
9%
9%
Improved return on
investments
Benefits the
banking/lending
industry
Benefits the insurance
industry
Gold price would be
impacted
Would improve their
revenue/net profits
And why do you say (a rate increase) would have a (positive/ negative/ neutral]
impact?
Positive Impacts Negative Impacts
56%
18%
12%
12%
7%
5%
5%
4%
4%
Limits access/rates for the company to
capital/financing, impact on repayment of debts,
borrowing is more expensive for the company
Cost of borrowing increased (general mention)
Will negate the companies opportunities for
growth/expansion, will not be able to grow their
business
More cost to operations, increase cost of doing
business
Depletes money they can spend on goods, hurts
consumer spending
Negative effects on economy/market/inflation
rates
Less competitive with their product, less
competitive for demand on their commodity
They would have to /don't want to raise the cost of
products to the consumer, trickle down and hurt
the the consumer, have to raise their prices
Negative effects on shares/stock, less yield for
shareholders
Positive impact n=22 | Negative impact n=57

27. 27272727
Expectations for the C$
5%
66%
21%
1%
1%
Total
Below 70 Cents US
Between 70 & 75
Between 75 & 80
Above 80 Cents US
DK/NR
In May of this year the Canadian dollar reached a value of close to 73 cents US. What
value for the Canadian dollar would you assume or are assuming for near- and
medium-term company forecasts? Would it be…:

28. 28282828
The Impact of a Low C$
48%
52%
35%
67%
49%
56%
32%
67%
33%
55%
38%
34%
49%
27%
42%
29%
42%
14%
52%
34%
14%
14%
16%
7%
9%
15%
26%
19%
15%
10%
Total
West
ON
ROC
1-200
201-1000
1000+
Manuf.
Serv.
Res.
Very/somewhat positive Neutral Very/somewhat negative
If the value of the Canadian dollar reached and stayed at about 70 cents US by the end
of 2017, would the net impact on YOUR COMPANY be positive, negative, or neutral?
Is that very or somewhat ?
West n=86 | Ontario n=43 | ROC n=15 | Company Size: n(1-200)=77, n(201-1000)=41, n(1000+)=31 |
Sector: n(Manuf.)=21, n(Serv.)=60, n(Res.)=67 |

29. 29292929
Canada’s Economy & The C$
6%
16%
46%
48%
40%
30%
30%
33%
15%
17%
12%
3%
5%
Total
West
Ontario
Very Positive Somewhat Positive No change
Somewhat negative Very negative DN/NR
If the value of the Canadian dollar reached and stayed at about 70 cents US by the end
of 2017, do you think the net impact on the Canadian ECONOMY would be positive,
negative, or neutral?

30. 30303030
Impact of a 70-cent C$ on Trade
93%
79%
83%
5%
13%
11%
2%
8%
7%
Ontario
West
Total
Positive No difference Negative DK
And what would the impact be on Canada’s trade with the US with a 70-cent dollar?
Would it have a positive or negative impact on Canada’s trade with the US?