Canada becoming less competitive than U.S.: survey

A survey of business leaders shows more than two-thirds of those polled (67%) see Canada as a less competitive place to invest and do business versus the U.S.

The Charted Professional Accountants of Canada’s Q1 2018 CPA Canada Business Monitor, a survey of professional accountants in leadership positions, identified the top three challenges facing the Canadian economy as:

U.S. trade protectionism (30%)
Uncertainty in the Canadian economy (18%)
U.S. tax reforms (7%)

Eighty-four percent of those polled agreed there’s an urgent need for a detailed analysis of U.S. tax reforms, which Congress passed late last year, to assess the potential effect on Canada. The results of such an analysis should be made public, 93% said.

“Uncertainty is dominating, especially with growing protectionist trade sentiments and tax changes in the U.S.,” said Joy Thomas, president and CEO of CPA Canada, in a release. “Canadian business leaders are looking for assurance from the federal government that the situation is being properly monitored to allow a course of action to be developed that will keep Canada competitive.”

Optimism about the Canadian economy fell to 34% in Q1 2018 from 48% in Q4 2017, the lowest level since 2016.

The sense of uncertainty contrasts with the Bank of Canada’s latest business outlook survey, which found that firms are upbeat about future sales, business investment and hiring.

Read: Firms positive about future, but some see moderation ahead: BOC survey

However, 69% of those polled in the CPA survey are predicting their companies’ revenues will grow in the next 12 months, and 63% expect an increase in profits. Those numbers are similar to the last quarter.

Business leaders also identified the top three factors affecting their business planning in the next year: