Toronto, January 19, 2022 – Supply chain concerns paired with a resurgent pandemic are the top two challenges to the growth of the Canadian economy cited by business leaders, according to a new survey conducted for Chartered Professional Accountants of Canada (CPA Canada).
The latest CPA Canada Business Monitor (Q4 2021) finds only 43 per cent of respondents surveyed in the fourth quarter were optimistic about Canada’s economic prospects over the next 12 months, down significantly from 52 per cent the previous quarter. The number of survey participants expressing outright pessimism remains basically unchanged (19 per cent in Q4 versus 20 per cent in Q3) but the number who remained cautiously neutral has grown to 38 per cent from 28 per cent.
The number of respondents either extremely or very concerned about the effect COVID-19 might have on the economy in the coming year jumped to 37 per cent in the last quarter of 2021 from 21 per cent in Q3.
“For almost two years now, the pandemic and its economic fallout have put Canadians and our economy on an unprecedented and challenging course,” explains Charles-Antoine St-Jean, president and CEO, CPA Canada. “Business ingenuity and major contributions from governments have helped us weather the storm but, with the spread of Omicron, the private and public sectors must continue to work together to manage the evolving situation.”
The top five challenges to Canadian economy identified by respondents in Q4 were supply chain issues (20 per cent), negative effects of COVID-19 (18 per cent), the rise in inflation (15 per cent) and employee recruitment, retention and development (15 per cent) and a lack of skilled workers (eight per cent).
To help Canadian businesses attract skilled workers, survey participants want the federal government to increase immigration levels for people in job categories that are in demand (49 per cent) and offer better support training for workers (47 per cent).
To address recruitment and retention, respondents reported that their respective companies are increasing compensation (67 per cent), supporting hybrid work arrangements (50 per cent) and improving work-life balance options (46 per cent).
Climate Change and Federal Government Finances
Survey participants also believe the environment requires attention with 63 per cent agreeing that the federal government should focus on mitigating climate change.
Business leaders also continue to be worried about the federal government’s fiscal position, with 59 per cent of the respondents either extremely or very concerned, down marginally from 63 per cent in Q3. Thirty-seven per cent feel the most important factor to ensure responsible fiscal management of Canada’s finances is to set hard limits on government spending and indebtedness. Other solutions cited were improving oversight of government finances (25 per cent) and conducting an independent review of government spending (24 per cent).
While concerns about the overall economy have risen, optimism about their own businesses remains high at 69 per cent, which is essentially unchanged from the previous quarter (70 per cent).
Expectations for growth over the next 12 months saw 78 per cent of respondents believing revenues will increase at their respective organization (74 per cent in Q3), while 57 per cent forecast an increase in the number of employees (52 per cent in Q3). In terms of profits, 64 per cent of those surveyed are expecting a rise, which is stable compared to Q3 (62 per cent).
The CPA Canada Business Monitor is issued quarterly, based on a survey commissioned by CPA Canada and conducted by NielsenIQ. The report draws upon business insights of professional accountants in leadership positions in privately and publicly held companies.
For the Q4 2021 study, emailed surveys were completed by 525 of 5,994 people identified by CPA Canada as holding senior positions in industry (CFOs, CEOs, COOs and other leadership roles). Respondents work for a mix of small, medium and large companies, as determined by employee size. The response rate was 15.9 per cent, with a margin of error associated with this type of study ±4 per cent, with a confidence level of 95 per cent. The survey was conducted from December 12, 2021 to January 3, 2022. Further information can be found in the survey’s background document, which is available online at cpacanada.ca/businessmonitorQ42021.