Canada continues to be seen as less competitive

Canada continues to be seen as less competitive when compared with the United States and tax weighs heavily in that viewpoint, according to a survey of business leaders by Chartered Professional Accountants of Canada (CPA Canada).

Toronto, July 17, 2018 – Canada continues to be seen as less competitive when compared with the United States and tax weighs heavily in that viewpoint, according to a survey of business leaders by Chartered Professional Accountants of Canada (CPA Canada).

The CPA Canada Business Monitor (Q2 2018) recently surveyed professional accountants in leadership positions. The findings of the quarterly survey show that 68 per cent of the respondents view Canada as a less competitive place to invest and do business versus the United States when compared with a year ago. That viewpoint is basically unchanged from the previous quarter.

When asked what is the primary reason for the country being less competitive, Canada’s overall tax burden was the top response, cited by 29 per cent of participants. U.S. tax reform was second, referenced by 14 per cent of those surveyed.

“Canada’s tax system is fundamental to creating a competitive environment,” explains Joy Thomas, president and CEO, CPA Canada. “The survey findings reinforce the need for a comprehensive review of Canada’s tax system, led by an independent expert panel, that would strive to reduce complexities, address inefficiencies, improve fairness and ensure economic competitiveness.”

The number of respondents expressing optimism about the prospects for the Canadian economy over the next 12 months was 32 per cent, essentially unchanged from the opening quarter. However, that is down significantly from the second quarter of 2017 when 50 per cent of respondents expressed an optimistic outlook.

The top two challenges to the Canadian economy identified by survey participants in the latest survey are U.S. trade protectionism (39 per cent) followed by uncertainty in the Canadian economy (14 per cent).

Company Specific Findings:

Company optimism sits at 53 per cent. This is how the professional accountants surveyed feel about the prospects for their own companies over the next 12 months.
Roughly two thirds (68 per cent) say revenues will increase in the next year and 60 per cent say profits will increase.

Almost six in ten Canadian business leaders surveyed (58 per cent) say they have difficulty finding enough skilled workers and professionals to fill certain positions. The positions hardest to fill over the past two years were: skilled trades (37 per cent), skilled/IT positions (22 per cent) and middle management (17 per cent).

Personal Debt:

The strong majority of Canadian Business Leaders (83 per cent) say the federal government should continue to warn Canadians to reduce their level of personal debt. Four in ten (41 per cent) say the level of personal debt is a threat to future demand for their company’s products and services.

Methodology

The CPA Canada Business Monitor is issued quarterly, based on a survey commissioned by CPA Canada and conducted by Nielson. The report draws upon business insights of professional accountants in leadership positions in privately and publicly held companies.

For the Q2 2018 study, emailed surveys were completed by 466 of 5,922 identified by CPA Canada as holding senior positions in industry (CFOs, CEOs, COOs and other leadership roles). The response rate was 9.7 per cent, with a margin of error associated with this type of study ±4.4 per cent, with a confidence level of 95 per cent. Further information regarding response rate calculations can be found in the survey’s background document. The survey was conducted from May 31, 2018 to June 17, 2018.

A background document is available online at cpacanada.ca/businessmonitor.