Analyzing the attitudes and opinions of Canadian executives for the past couple of years, one could get the impression there is a lack of confidence in Canada's economic prospects. The C-Suite foresees sluggish economic growth. It hopes a lower dollar will increase competitiveness. Enthusiasm about corporate prospects is muted.
However, when viewed relative to other countries, the Canadian C-Suite is incredibly bullish about this country's ability to compete. In a quite un-Canadian display of an "Own the Podium" type attitude, Canadian executives think Canada has been and will be the clear beneficiary of any trade deals. This is important because it means Canadian business leaders are not looking nervously at global markets as a Hail Mary pass in the face of U.S. economic decline. They see expanded global trade for Canada as a real opportunity for economic gains.
Half of executives in this quarter's survey think that both Canada and the U.S. have benefited about equally from NAFTA. But among those who think one side has done better than the other, Canada comes out on top by a three-to-one margin.
And they are equally confident about other markets. Many see expanded trade with the U.S. as a priority, but the top offshore markets for more open trade are China, Europe and India – with India diminishing slightly in importance over time while the importance of Europe has risen. Executives overwhelmingly reject the idea that a proposed trade deal will benefit Europe more than Canada. The C-Suite also sees China as a tremendous opportunity, but one that comes with some large caveats.
In an open environment for trade and investment, 80 per cent of business leaders think that either Canada would benefit more than China or that both countries would benefit equally. The manufacturing sector is more nervous about trade with China, but both the resource and service sectors see opportunity. In part that is because the manufacturing sector sees China as a trading opponent, while the service and resource sectors see China as a source of investment and capital.
Standing in the way is quite a large "trust gap." Near the top of the list of things that executives want Canada's premiers and prime minister to raise with Chinese and Asian leaders at upcoming meetings are "the rule of law" and patent protection. The C-Suite thinks any free trade deal with China needs to address corporate espionage, including real penalties. It also thinks that China is less likely than Europe or the United States to honour the terms of a free trade agreement. There is little inherent trust that the Chinese can be considered partners. Executives endorse entering into a trade agreement with China, but want the Canadian government to be wary.
David Herle is principal of Gandalf Group