C-Suite 45th Quarterly Survey 2016

The 45th Quarterly C-Suite Survey
December 19, 2016
Sponsored by:
Published and
broadcast by:

2222
Introduction
 Methodology: telephone interviews with 155 C-level executives from
ROB1000-listed companies between November 16th & December 8th,
2016.
 This quarter’s survey asked the C-Suite about the US Presidential
Election and its potential impacts on:
 Trade agreements and the economy
 Canadian businesses
 The Government of Canada’s relations with the White House

3333
Key Findings
 The C-Suite strongly believes the Trump Administration will be a boon for:
 The US economy
 The North American energy sector, including pipeline approval & Canadian crude oil prices
 Equity markets: i.e. the Dow Jones Industrial and TSX composite averages
 Half (52%) expect their businesses to benefit from the transition to a Trump
Administration. A much smaller number have adjusted business plans to take advantage
of or respond to the change in US Administrations (13%).
 While the C-Suite feels mostly positive about the outlook for the US, their businesses
and certain sectors, most expect the broader Canadian economy will suffer.
 Whereas more now expect the US economy to grow (and grow strongly) in 2017 there is no
improvement in the outlook for the Canada this quarter compared to last.
 The impact on trade is the top-of-mind concern Canadian businesses have about Trump.
 Most believe Trump will make good on his threats to renegotiate or withdraw from NAFTA and that
his Administration will make other moves that would hamper global trade.
 Half believe a Trump Administration will negatively impact the Canadian economy and most expect
Canadian businesses will be less competitive in two years time.
 Most doubt the current Canadian government will enjoy good relations with the President-elect;
relations that will be important, they say, given the need to advocate for access to markets.
 There is a division of opinion as to whether Canadian governments should suspend the introduction
of carbon pricing policies. Just over half believe the change in US Administrations means
governments here should delay carbon pricing – 44% disagreed with this.
Detailed findings follow.

4444
The Upside of
A Trump Administration
 The C-Suite is decisively of the view that the election of Donald Trump will be
positive for the US economy.
 Most now believe that the political environment for business in the US will be
positive. In September, less than half agreed with this and many were unsure.
 The C-Suite expects the Dow-Jones to increase in 2017, as well as the TSX
(albeit to a lesser extent).
 The proportion that expects the US economy to grow strongly is up
significantly - 15 points.

5555
Trump A Boon For US Economy
83 3 14 1
0 20 40 60 80 100
Total
Positive No difference Negative DK
Do you think the transition to a Republican Trump Administration will have a
positive or negative impact on the US economy over the next two years?

6666
Most Say The Political Environment
for Business in US Will Be Better
65
38
22
24
12
24
1
14
0 20 40 60 80 100
Q4 2016
Q3 2016
Better About the same Worse DK
Generally speaking, do you think the political environment for business in the United
States will be better, worse, or about the same over the next 5 years than it has been
over the last 5 years?

7777
Expectations For Dec. 2017:
Dow Jones Industrial and TSX Up
10
5
59
54
17
25
13
15
0 50 100
The Dow Jones Industrial
average
The average of the TSX
composite index
Significantly higher Somewhat higher About the same as now
Somewhat lower Significantly lower DK
How do you expect (read item) to be doing by the end of 2017? Is it in your view likely
to be significantly higher, somewhat higher, about the same, somewhat lower, or
significantly lower than now?

8888
The Upside of
 The overall economic outlook for the US is significantly more positive this
quarter compared to last.
 That said it is a minority that expects strong economic growth in the US 2017.
Most expect moderate growth for the US next year.
 Despite this improved outlook, one of the most interesting findings of this
survey is a sombre opinion about the long-term prospects for the US.
 Most disagree that its best days are ahead, a reflection possibly of both socio-political
issues as well as economic.
 They are somewhat more likely to agree Canada’s best days are ahead.

9999
US Economic Outlook
24
9
70
77
6
13
0 50 100
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?

10101010
Canada’s Best Days Are Ahead
14
15
55
37
25
34
5
10
2
3
0 50 100
Canada's best days are ahead
The best days of the United States
are ahead
Strongly agree Somewhat agree Somewhat disagree
Strongly disagree Don't know
I'm going to read some statements people might make about issues affecting Canada
and the US and I'd like to know if you strongly agree, somewhat agree, somewhat
disagree or strongly disagree with each.

11111111
The Upside -
Energy Markets
 Executives expect a Trump Administration to positively impact energy
markets.
 Despite his protectionist talk, most think Trump will even be good for
Canada's energy markets.
 The vast majority expects his Administration will approve Keystone XL within
2 years.
 It is perhaps not surprising therefore that Western Canadian executives are
more bullish about what Trump will mean for the North American economy.
 Most expect Canadian crude to fetch higher prices in a year’s time, including
the vast majority in the oil & gas sector who agree with this.
 There is no consensus around whether Canada’s dollar will slide further or stay
close to its current value.

12121212
Energy Sector to Benefit From
Trump Administration
41
21
47
48
5
23
3
7
6
1
0 50 100
Donald Trump's Administration is
likely to approve the keystone XL
pipeline by the end of 2018
Donald Trump's Administration is
likely to be supportive of developing
Canada's oil and gas resources

13131313
Potential Positive Impacts of Trump
34
22
11
6
5
3
2
5
0 20 40
Increased support for energy sector
(pipelines, commodity prices)
Increased Can-US trade
No changes to NAFTA
Renegotiating NAFTA/trade agreements
Weakened dollar would help Cdn exports
Renewed interest in Cdn manufacturing
Resolving softwood lumber
None
What would be a positive impact or outcome for Canada’s economy following the
transition to a Republican Administration led by Donald Trump? (Open ended - %
selecting each)

14141414
Expectations For Dec. 2017:
Crude Oil $ Up, CAD$ Down
5
1
55
23
35
34
3
37
2
5
0 50 100
The price of Canadian crude
oil
The value of the Canadian
dollar
Significantly higher Somewhat higher About the same as now
Somewhat lower Significantly lower DK
What do you expect _______ will be by the end of 2017? Do you expect it will be
significantly higher, somewhat higher, about the same as now, somewhat lower, or
significantly lower than now?

15151515
C-Suite Companies
 Roughly half (52%) expect a Republican Trump Administration will be
positive for their businesses.
 This is especially pronounced among resources executives, although even some in
manufacturing feel positively. Most expect oil & gas to do well with a Trump
Administration, and almost as many said the same for the automotive sector.
 Only 13% said their companies are currently changing or intending to change
business plans to take advantage of the new political environment. This
includes several who are considering shifting focus to or activity at their US
operations.
 Executives are also feeling better overall about their businesses this quarter as
well as last: their outlook improved somewhat over 2016, especially in the
resources sector.

16161616
Positive Impacts of Trump
Administration
52
62
31
48
33
66
32
18
56
33
53
17
14
17
12
19
11
14
3
3
2
4
3
0 20 40 60 80 100
Total
West
Ontario
Manufacturing
Services
Resources
positive or negative impact on your business over the next two years?

17171717
Political Environment Expected to Improve
for Oil & Gas and Automotive Sectors
86
62
10
26
5
10 1
0 20 40 60 80 100
Oil and Gas
Automotive
Better About the same Worse DK
Do you think the political environment for ______ sector in the United States will be
better, worse, or about the same over the next 5 years than it has been over the last 5
years?

18181818
Co. Response to US Election: Few
Plan on Investment in US
30
15
15
10
10
0 10 20 30 40
Increase business & investment
in the US
Preparing for growth (deploying
capital, making production
investments)
Nothing yet, still planning
Focus efforts on US mining
projects
Planning for all potential
changes to carbon emissions
standards
Is your business considering or doing anything differently in response to the result of
the US election? / What is your business considering or doing differently in response
to the result in the US election? [n=20]
Yes, 13No, 87

32
28
27
19
21
57
61
58
58
58
9
10
13
20
19
1
1
1
1
1
1
2
1
0 20 40 60 80 100
Q4 2016
Q3 2016
Q2 2016
Q1 2016
Q4 2015
Strong Growth Moderate growth Moderate decline
Strong decline Don't Know
19191919
Dec. 2016 Outlook for Business
What are your expectations for your company over the next 12 months, strong
growth, moderate growth, moderate decline, strong decline?

32
14
33
35
57
71
60
52
9
14
7
9
1
3
1
1
0 50 100
Total
Manufacturing
Services
Resources
Strong Growth Moderate growth Moderate decline
Strong decline Don't Know
20202020
Outlook for Business
What are your expectations for your company over the next 12 months, strong
growth, moderate growth, moderate decline, strong decline?

21212121
The Downside Risk
 Executives are fairly sanguine about the world.
 Whether it is Europe’s banks, income inequality, the real estate market or the
state of oil & gas, fewer than one in five describes themselves as very worried.
 The only outlier is the impact of politics on trade: almost 30% are very worried
about this issue and almost none are unconcerned.
 Few believe Donald Trump was bluffing about renegotiating or even backing
out of NAFTA.
 Most expect his Administration to take trade measures aimed at China.
 Most believe his Administration could bring about a slow-down in global
trade.
 Most also agreed that the new Administration’s policy on immigration could
harm the US economy in the long-run.

22222222
Global Trade a Top Concern
26
15
22
18
16
14
58
61
46
46
46
44
13
19
21
26
25
28
3
5
10
9
12
12
1
1
2
0 50 100
The implications of politics on
trade and trade agreements
The performance of Canada's
economy
Canada's oil and gas industry
Income inequality in North
America
The stability of Europe's banking
system
Canada's real estate market
Very worried Somewhat worried Not very worried
Not at all worried DK
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 ...?

23232323
Most Say Renegotiating NAFTA and
Tariffs on China Likely
41
38
10
6
46
45
45
21
11
14
37
41
1
2
6
33
1
1
1
0 50 100
Attempt to renegotiate
NAFTA
Increase tariffs on Chinese
goods
Increase tariffs on
Canadian goods
Make no changes to NAFTA
Very likely Somewhat likely Not very likely
Not at all likely DK
In his campaign, Donald Trump voiced strong criticism of NAFTA and trade with
China. Would you say it’s very likely, somewhat likely, not very likely, or not at all
likely that President Trump’s Administration will…

24242424
Trump Admin. Expected to Hurt
Competitiveness, Trade & Relations
21
14
39
45
27
32
11
8
2
2
0 50 100
Donald Trump's immigration policies
would make the US economy less
competitive in the long term
Donald Trump's Administration will
likely lead to a decline in global trade
levels

25252525
The Downside Risk
 The impact on trade is the top-of-mind concern the C-Suite has about the
impact a Trump Administration could have on Canada’s economy.
 A smaller proportion said their top concern was the possibility of strained Canada-US relations or
the risk of Canadian companies becoming uncompetitive if the Administration reduces US
regulations and taxes.
 To be sure, most in the C-Suite believe Canadian businesses will be less competitive compared to US
competitors in a few years' time.
 Most doubt there will be new tariffs on Canada, but many think it’s quite
possible – 43% saying this.
 Indeed, many (50%) believe the Trump Administration will be have a negative
impact on Canada’s economy, and most expect a negative impact on Canada-
US trade, in spite of optimism about energy markets.
 Whereas executives are increasingly bullish about the US economy and equity
markets in particular, outlook for the Canadian economy is unchanged this
quarter and only modestly positive.

26262626
Potential Negative Impact of Trump
25
19
18
7
6
5
4
3
3
2
2
0 10 20 30 40
Renegotiating or ending NAFTA
Increased protectionism concerning trade
Reductions to market access
Rising tariff costs
Less tax/reg'n making US co's more comp've
Potential for delcining political relations
Negative impact of lumber industry
Negative impact on energy sector
Negative impact on interest rates
Canadian currency devaluation
Increased immigration and security concerns
What would be a negative outcome for Canada’s economy following the transition to a
Republican Trump Administration? (Open Ended - % Saying Each)

27272727
Canadian Businesses Expected to
Become Less Competitive
1
1
32
21
44
3
4
3
52
60
47
10
14
5
2
0 20 40 60 80 100
Total
West
Ontario
Much more competitive Somewhat more
No change Somewhat less
Much less competitive Don't know
The cost competitiveness of Canadian businesses is determined by many factors.
Generally speaking, do you think that two years from now Canadian companies will
be more competitive or less competitive than their US competitors?

28282828
Outlook For
Canada’s Economy
2
1
70
64
26
34
1
1
1
1
0 50 100
Q4 2016
Q3 2016
Strong growth Moderate growth Moderate decline
Strong decline DK/NR
What are your expectations for the Canadian economy over the next 12 months?

29292929
Negative Impact of
43
39
24
22
23
8
10
10
34
50
65
68
1
2
1
Canada-US security
The Canadian Economy
Trade between Canada and
the US
Canada-US relations
positive or negative impact on _______ over the next two years?

30303030
Canada-US Relations
 Few expect Prime Minister Trudeau and the President-elect to enjoy good
relations.
 Most expect Canada-US relations to deteriorate.
 Less than a third expect Trump & Trudeau to enjoy good relations – most doubt they will.
 Nearly half of the C-Suite (48%) agreed a Trump Administration will be worse for Canada’s interests
than the Obama Administration was.
 This is especially worrisome for the C-Suite in so far as the clear hope is
Canada’s government should be pressing for continued market access.

31313131
Canada-US Relations
14
6
37
25
34
45
14
23
2
2
0 50 100
A Republican administration led by
Donald Trump will be better for Canada's
economy than the Administration of
President Obama
PM Trudeau & President Trump are likely
to enjoy good relations

32323232
Preserving Free Trade Should Be
Government of Canada’s Priority
64
18
15
14
8
4
3
3
3
3
3
10
0 10 20 30 40 50 60 70
Preserving free trade, tariff levels & market access
Security
Energy and pipelines
NAFTA
Environmental standards
Softwood lumber agreement
Defence and Counter-terrorist
International affairs
Immigration
Canadian financial regulatons
Harmonization of regulations
Other
Different White House Administrations have collaborated on various important
issues with Canadian governments over the years. What issues should the CANADIAN
government be prioritizing in its relations with the new Trump Republican
Administration over the next two years?

33333333
Carbon Pricing
 Despite concern about Canadian competitiveness, the C-Suite is divided on
whether or not Canada should suspend carbon pricing policy.
 Fifty-two percent agreed the election of a Republican Administration and
Congress means Canadian governments should suspend the introduction of
national carbon pricing.
 While 44% disagreed, strong agreement that Canada should step back from
planned carbon pricing is notably higher than strong disagreement. The
strongest opinion comes from the oil & gas and resources sectors.

34343434
Suspend Carbon Pricing
28
35
20
24
14
39
43
24
27
22
29
19
26
36
32
27
34
33
40
26
14
12
9
19
14
21
5
4
4
1
5
6
4
4
0 50 100
Total
West
Ontario
Manufacturing
Services
Resources (incl. Oil & Gas)
Oil & Gas
I'm going to read some statements people might make about issues affecting Canada and the US
and I'd like to know if you strongly agree, somewhat agree, somewhat disagree or strongly disagree
with each.
The election of a Republican Administration and Congress means Canadian
governments should suspend their plans to introduce national carbon pricing

C-Suite 45th Quarterly Survey 2016

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