Canada's Liberal government came to power on a surge of popular support in the final days of the fall election. More recent polling suggests the Trudeau government is in full honeymoon phase. Within the C-Suite, however, the reaction is more muted.
Most executives surveyed this quarter see the new government as a negative development for business in Canada.
Few said the Liberal win was a strongly negative outcome, but at best many are in a wait-and-see mode, with particular concern about various tax changes pledged in the campaign.
The new government does have its supporters, with 39 per cent of the C-Suite saying the Liberal win could be a positive development for business. Even more support the Liberal plan to increase investment in infrastructure.
Past surveys showed executives are divided between those who want stimulus spending and those who prefer restraint. This division of opinion persists despite a deficit plan the Liberals touted as "modest." Half said they support the government's infrastructure spending while 49 per cent are opposed to the deficits Liberals intend to run.
The C-Suite might be more aligned with the government in the areas of trade and resources.
If there is going to be a reformed energy review process, executives want the new government to get on with it, and with the possibility of approving new projects. While there isn't strong enthusiasm for climate-change regulations, business leaders told us they want certainty, at long last. How the government squares that circle in the wake of the Paris agreement may be its biggest challenge and most consequential legacy.
Trade could be the area where business and the government are most positively aligned. The vast majority of the C-Suite supports implementing the Trans-Pacific Partnership. While the government is still reviewing that trade agreement, it had endorsed the main tenets behind it. There is near consensus that facilitating more access to markets and even reducing barriers to Canada-U.S. trade should be among this government's highest priorities. Most executives said improving relations with the U.S. administration should be a high priority.
Underpinning all this is the persistently weak outlook for the Canadian economy, in contrast to what executives see in the United States. Less than half of the C-Suite believes it likely that Canada's economy will grow in 2016. That outlook, coming on the heels of poor results in 2015, should be the start of a serious discussion with the new government on a vision for growth in the long run.
Reports of sagging federal and provincial government revenue simply underscore the imperative. As the new government implements a three-year stimulus plan along with a national energy pricing plan, it will be even more important to chart the long-term plan for growth as well. If that is centred on a bold plan for access to markets, it would be well received.
David Herle is principal and Alex Swann is vice-president of Gandalf Group.