In Jim Flaherty, the business community has a finance minister that it has developed great confidence in, and affection for.Sean Kilpatrick/The Canadian Press
Canadian executives are pleased with the result of the recent federal election. Since previous C-Suite surveys have shown that business leaders overwhelmingly supported the Conservatives, it is not surprising that they are happy there is now a Conservative majority government. And business has a finance minister that it has developed great confidence in, and affection for. Jim Flaherty's handling of the recession and financial crisis has turned a skeptical business community into believers.
When the Conservatives had a minority, business was patient and understanding about the difficulties the government had in implementing its program. Now expectations are higher, and business priorities are clear.
The economic context is important. The C-Suite does not think these are good times. Rather, business leaders see nothing but sluggish growth ahead, and increasingly choppy water in the United States. Fewer executives are as confident about their businesses as they were a year ago.
Their first ask of government is to get its fiscal house in order. Business accepted the deficits that came with stimulus spending. But for a year now they have been calling for those deficits to be reined back in more aggressively. With a majority government, there is a strong expectation that Ottawa will move quickly to restore balanced budgets. That fiscal improvement is expected to be accomplished by getting spending under control. Evidence of that is the fact that controlling public health expenditures is one of the highest priorities business would assign government.
Business is making an interesting wager in calling for government to retrench. For many companies the weak economy (especially consumer spending), is the biggest problem they face. They are assuming that fiscal retrenchment will improve the economy – a common but not universal belief among economists.
The fragility of the economy has business also asking that government do no economic harm. Climate change policy is a victim of that mindset. Before the recession there was significant support among Canadian business leaders for action against climate change, and even a willingness to consider a carbon tax. That sentiment has melted away along with the polar ice caps – many executives would now oppose the introduction of either a carbon tax or a cap and trade system.
There is more on the business agenda than just deficit reduction, especially for those companies that feel the potential for growth. Lack of access to capital remains an impediment to business activity thanks to a risk-averse lending community. In the resource sector, there remains a real problem in finding the right skilled labour. Even those executives who are not facing a labour crunch include it as one of the most important issues for Canadian businesses. This is an area where the C-Suite has told us in the past there is a role for government through immigration, foreign credential acceptance, and education.
While the government works on closer economic and security ties with the U.S. (something most executives would support), there is more pressure from Canadian business for improved ties and access to Asian markets. Both the nature of Canadian goods and the weakness in the U.S. economy are turning Canadian executives' attention somewhat away from the United States and toward the BRIC countries.
The C Suite has the government it wanted; now it wants that government to get busy on the economy.
David Herle is principal of the Gandalf Group
154 executives interviewed
The quarterly C-suite survey was conducted for Report on Business and Business News Network by the Gandalf Group and sponsored by KPMG.
The survey interviewed 154 executives between May 24 and June 9, 2011. Respondents represent ROB 1,000 companies from across Canada in the manufacturing, service and resource sectors. The margin of error is 7.4 per cent, 19 times out of 20.
Each quarter, a $1,000 charitable contribution is made on behalf of a survey participant. For the March survey, a donation was made to the Stand Foundation on behalf of Robert McLeod, vice-president of Full Metal Minerals Ltd.
Want to know more about what the country's business leaders think? Join Michael Hainsworth Monday night on BNN for the C-Suite Survey at 8:30 p.m. ET.