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Linda Hasenfratz, Chief Executive Officer of Linamar Corporation, talks with audience members following a roundtable discussion on Canadian manufacturing at Ivey's Tangerine Leadership Centre in downtown Toronto on Thursday, September 10, 2015.J.P. MOCZULSKI/The Globe and Mail

The relentless drumbeat about economic weakness risks becoming "self-fulfilling," dragging down otherwise healthy sectors, warns the new head of one of Canada's leading business groups.

Linamar Corp. chief executive officer Linda Hasenfratz, 49, who begins a three-year stint this week as chair of the newly renamed Business Council of Canada, says a lot of the economic worries are unfounded, outside the hard-hit energy sector.

"It's a concern that there is all this concern," Ms. Hasenfratz, who heads one of Canada's largest auto-parts manufacturers, said in an interview. "That's the biggest issue – everyone talking about this softness, and making everyone start to worry. It's a self-fulfilling prophecy."

Ms. Hasenfratz is the first woman to chair the 40-year-old Canadian Council of Chief Executives, which, effective Wednesday, becomes the Business Council of Canada – a change aimed at simplifying the group's acronym and avoiding occasional confusion about whom it represents.

"I think it's a reflection of a changing business environment," Ms. Hasenfratz said of her election as the group's first-ever female chair. "Progress is being made, in boards and executive positions. It's not 50-50, but we're making great progress. We're miles ahead of where we were 15 years ago."

It's the second name change for the group, founded in 1976 as the Business Council on National Issues. The council is made up of the chief executives or owners of 150 mainly large Canadian companies, which account for more than half the value of the Toronto Stock Exchange.

Ms. Hasenfratz takes over from Power Corp. of Canada CEO Paul Desmarais Jr. John Manley, a former federal Liberal cabinet minister, remains the group's president and CEO.

Mr. Manley acknowledged that Canada has become a "multispeed economy," with commodities clearly suffering and much of the rest doing "okay." But the perception, particularly in financial markets, suggests something far worse, he said.

"One of our members calls it the Great White Short," Mr. Manley said. "[There is] the view that if oil is down, then the whole Canadian economy must be in the tank. If real estate prices are high in Toronto and Vancouver, then the whole Canadian real estate market is due for a crash."

Linamar, which has 48 plants around the world, is seeing "stronger numbers," not just in North America, but also in Europe and Asia, Ms. Hasenfratz pointed out.

"There are obviously pockets of concern, but I don't like it when we continue talking about these negative aspects because it does start to affect people's behaviour, and then it becomes a reality," she said.

"We shouldn't paint a broad brush. There are plenty of people out there investing and seeing the opportunities. If people are worried and they keep picking up on this negative sentiment, it will start to affect their desire to invest. That's sort of a downward spiral."

Echoing the views of other business leaders, Ms. Hasenfratz said the rapid devaluation of the dollar has not been helpful for many Canadian companies.

"The lower the better isn't necessarily true," she said, particularly for companies such as Linamar, which has been expanding outside Canada. "As we look to invest in other jurisdictions, and try to grow our business, it becomes more difficult."

In October, Linamar announced a $1.16-billion deal to buy French auto-parts maker Montupet. That acquisition will now cost more in Canadian dollars.

"It's costing me a lot more money now than it was six months ago," Ms. Hasenfratz said of the French transaction. "The issue is how quickly [the currency] has changed. It's the volatility. When the currency is stable, you can work around it. You can change your business a bit to create more of a natural hedge."

On the whole, a stronger Canadian dollar is "a better thing for the country and for our ability to be a stronger player on the global stage," she said.

However, the lower dollar increases the competitive position of exporters, which produce in Canada, but generate sales in U.S. dollars.

Ms. Hasenfratz said her priorities include pressing the new Liberal government in Ottawa to invest in innovation and education, ratify recent trade deals and reduce "the regulatory burden on companies."

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