Striking the right balance | KPMG | CA

Striking the right balance

Striking the right balance

C-Suite 48: Empowering the Canadian economy while managing disruption

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Partner, Global Chair - Consumer Markets, Partner-in-Charge - High Growth Markets

KPMG in Canada

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Striking the right balance

Canadian executives discuss the implications of convergent market disruptors in the latest edition of the Quarterly C-Suite Survey. Looking inward, the C-Suite provides insight on the impacts of the Bank of Canada's interest rate hikes and increases to minimum wage in Ontario and Alberta, on the Canadian economy. Conversely, the corner office is feeling remarkably uncertain around what the US will do in respect to NAFTA.

Top Highlights

The Bank of Canada & Interest Rates

  • Only 34% of C-Suite expects another rate hike in October. Most (64%) would oppose another rate increase by the Bank of Canada.
  • Opposition is significantly higher among Western Canadian businesses and those in the resources sector who were also more likely to say recent increases have negatively impacted them.
  • Only about 1 in 3 said it's likely the Bank will raise rates in October. This may be because almost all believe the economy is unlikely to post strong growth over the next 12 months, in spite of strong data over the last 3 months.

Increases to the minimum wage in Ontario and Alberta

  • Most Canadian executives oppose a minimum wage increase to $15/hr. by 2019, as proposed in Ontario. 51% would support the increase if it was phased in over four years (2021). 
  • 61% of executives based in Ontario said the minimum wage increase would not impact their companies
  • While most oppose the increase announced in Ontario and Alberta, there is not a consensus
  • 69% of C-Suite said the proposed increases in Ontario will have a somewhat negative impact on those economies; 52% said the same for Alberta.

Automation and advanced manufacturing

  • Concern about the impact of min. wage increases on manufacturing is modest.
  • 86% of Canadian executives think advanced technology will allow the manufacturing sector to rebound
  • 73% say they will be relying significantly more on advanced technology in the next five years to conduct tasks that can otherwise be completed by employees

NAFTA

  • There is remarkable uncertainty around what the US will do in respect of NAFTA.
  • Many are uncertain whether the Trump Administration will seek only minor changes to NAFTA or major changes or repeal it and start from scratch. 
  • The Canadian government has outlined its priorities for the renegotiation of NAFTA and the C-Suite sees some of these as important priorities. Most believe it should be a very high priority for Canada to seek:
    • Freer movement of workers & expanding the list of professions eligible for visas.
    • Access for Canadian companies to bid on local, state & federal government procurement and prevent "Buy America" protectionist policies.
  • Additionally, one of the highest priorities of those tested is for Canada to preserve the Chapter 19 dispute resolution process embedded in NAFTA.

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