The federal budget’s emphasis on skills training and infrastructure spending has tapped into some of the key desires among Canada’s executives, who think those are the kinds of measures needed to get the economy moving again.
The latest C-Suite survey of corporate executives shows that investing in skills training is the No. 1 factor they think will help boost the economy in the years ahead. Fully 90 per cent of those surveyed said that kind of spending will have a strong or somewhat positive impact on economic growth.
Multiyear infrastructure spending – another key plank in the budget – is also near the top of executives’ wish list, with almost three-quarters saying it will spur the economy.
Another action that could get Canada’s economy out of the doldrums, executives say, is the negotiation of free-trade deals, particularly with Asia and Latin American countries. Close to 90 per cent said those kind of trade deals would have a positive impact on the economy.
Over all, executives are optimistic about Canada’s economy, with 83 per cent expecting it to expand in the next year.
And 86 per cent think the U.S. economy will grow in the coming 12 months – the first time in three years optimism about the United States has outpaced enthusiasm for the Canadian economy.
But the C-Suite survey, which was conducted just before the budget was tabled last Thursday, underlines just how top-of-mind personnel and training issues are in corner offices these days, and how matching skills to jobs is seen as a crucial factor in keeping the economy rolling.
Human resource concerns loom large at SilverWillow Energy Corp., a Calgary-based oil sands developer. Chief executive officer Howard Lutley said that while SilverWillow is still at the pre-development stage, if its projects go ahead, “the availability of the right engineers and construction people – both at the professional level and the field level – is going to be an issue.”
Increased labour mobility within Canada would help, Mr. Lutley said.
Mr. Lutley said a bigger problem is the difficulty getting access to skilled workers in the United States or elsewhere. Arbitrary limits on the number of foreign workers don’t help, because in some years huge numbers of workers are needed in Alberta. “Flexibility is the key,” he said.
Indeed, 86 per cent of C-Suite respondents agreed that immigration is critical to meeting the labour market needs of Canadian businesses and more than three-quarters said admitting more foreign skilled workers will improve economic growth.
At Vancouver-based Catalyst Paper Corp., which hired 200 people last year, hiring needs will accelerate in the coming years because of an aging work force, CEO Kevin Clarke said.
“In the next five years, Canada is going to face a skill shortage of about a million people,” Mr. Clarke said. “Canada is an extraordinary country with extraordinary resources, but it just doesn’t have enough [skilled] people.”
Mr. Clarke feels that “intelligent immigration” – the strategic use of imported labour to fill gaps until skills training becomes effective – is an important stop-gap measure. The budget’s provisions that actually make it harder to bring in temporary foreign workers are “a mistake,” he said. “They will hurt the economy more than help it.”
Gerrard Schmid, CEO of Toronto-based banking service firm Davis + Henderson Corp., said a renewed emphasis on skills training may not make a huge difference in the short term, but it will be key to the country’s long-term economic success, particularly if Canada expects to be a leader in knowledge-based industries.
In the short term, helping skilled workers immigrate to Canada can be helpful, he said, but “training of Canadians needs to run in parallel.”
Mr. Schmid is lukewarm about the effectiveness of infrastructure spending, although he acknowledges it can help kick-start the economy in the short term, “I don’t necessarily see it as a long-term answer for the country.”
The C-Suite survey showed that executives would prefer to see infrastructure spending go to highways, roads, city transit systems and ports. Airports and intercity rail come father down the list.
Willy Kruh, national leader for KPMG’s high-growth markets practice, said executives’ interest in negotiating more free-trade deals is an important step forward, considering that many businesses have been reluctant to look beyond North America.
Mr. Kruh noted that a remarkable number of companies have said, in earlier C-Suite surveys, that they do not have an emerging-market strategy.
The renewed interest in free trade shows that “more and more Canadian companies are realizing that this world is getting smaller, that this country needs to be competitive on a global stage, and that they as companies need to be competitive in the global economy.”