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Fred Lum/The Globe and Mail

It has been half a decade since the crash of 2008, but only a minority of Canadian executives say their companies have fully recovered from the deep downturn that shocked the world.

The latest C-Suite Survey of business executives shows that while the vast majority are optimistic about their company's prospects, the scars of 2008-2009 still remain. Only 42 per cent say their firms are back to pre-recession health, and 12 per cent say they have seen no recovery at all.

The resource sector reports the weakest bounce-back, with only 28 per cent of executives saying they have fully recovered.

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"We're definitely not back to pre-recession levels," said Danny Chiarastella, vice-president of finance at Calgary-based oil and gas exploration services company Divestco Inc.

Things looked promising around the beginning of 2012, he said, but then business softened again in the third quarter.

Through the whole resource sector, and particularly in the service side of the oil business, "there is a lot of unease out there," Mr. Chiarastella said.

More broadly, a weak Canadian economy combined with a decline in growth in China, still-precarious government finances in Europe and a dysfunctional government in the U.S., have dampened recovery at many companies across the country.

David Ross, chief financial officer of Bonnett's Energy Corp., a Calgary-based oil-field services company, said he doesn't see a return to pre-recession vibrancy any time soon.

"We've had a reset of the bar of what is normal and what is not," he said, in part because financing is still tighter than it was before 2008. While it is certainly easier to raise money than it was during the recession, it is still not easy "unless you have a strong balance sheet," he said.

Among C-Suite respondents, only 40 per cent say credit conditions have returned to pre-2008 levels, and only 17 per cent of resource-sector companies say they have access to financing at the same level as before the recession.

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More than two-thirds also said they have changed the way they run their businesses as a result of the recession. The most common shift is to a more conservative approach to spending, as they take a much closer look at costs. Many are also being more careful about borrowing, and they are taking a cautious view in their long-term planning.

"We pay way more attention to all expenses now, whether it is rent, payroll, or small things such as printing costs," Mr. Chiarastella said. "I think most companies are like that today, at least in the resource sector."

Even companies that were not hit sharply by the recession have altered the way they operate. Michael Bernstein, CEO of Capstone Infrastructure Corp. said his business, which is based on long-term contracts, saw little volatility. But "we are more cautious" because of the recession, he said, and the company puts more effort into reducing interest-rate risk.

And because of the depth of the recession, "we'll stretch our scenario planning to wider ranges than we previous would have."

Still, as a group, Canadian executives are remarkable positive about their own company's outlook. Almost one-third think their businesses will grow strongly in the next year, and almost two-thirds expect moderate growth. The vast majority – about 90 per cent – expect the overall Canadian economy to expand moderately over the coming year.

The big question mark is what will happen to interest rates, said Stephen Evans, president of Pure Industrial Real Estate Trust, a Vancouver-based owner of commercial properties.

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The low rates of the past few years have been very good for real estate firms on the acquisition trail, Mr. Evans said, but if rates jump sharply that will change significantly. For companies still on a recovery trajectory, high rates would be a setback, he said. "Anybody who is financing any facet of their business is going to feel the pinch [from higher rates]."

Willy Kruh, global chair of consumer markets at KPMG, said the C-Suite survey reveals a "glass half-full" attitude among Canadian business leaders – in that they are optimistic while still being very cautious. At some point, he said, they are going to have to get a bit more aggressive in order to move forward.

It is very positive that companies have worked so hard to get lean, trim costs, and revisit their balance sheets, Mr. Kruh said, "but there is also a point where you can't get myopic – you have to spend to grow. Some of these companies need to say: 'We are lean enough, we've got our balance sheet [in order], we have to be prudent but if we are going to compete we have to acquire [assets] or grow our capacity.'"

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