From economic uncertainty to technological advances, Canadian businesses are grappling with an almost unprecedented amount of change, requiring decision-makers – in industry as well as in government – to focus their energies on the policies that will help Canada become more competitive and secure our prosperity.
The Canadian Chamber of Commerce’s Crystal Ball Report is a unique hybrid of economic forecast and synopsis of business insights. It reflects what the Chamber has heard from Canadian business leaders representing every size of business, from every sector and region of the country.
Top of mind for Canada’s business owners and leaders:
– Businesses are concerned about the fragility of the Canadian economy and our ability to respond to a downturn with continued deficits and accumulating debt;
– Competitiveness issues such as our burdensome tax and regulatory systems, continue to create uncertainty and are hindering major capital investment major capital outlays;
– The risk of ongoing or escalating trade tensions challenges our assumptions about the support for free trade at home and abroad, resulting in heightened economic competition and greater geopolitical risk; and
– Business innovation requires regular and consistent investments in technologies and skills training to keep up and compete as faster product cycles and market adoption are becoming the new norm.
While the federal government’s Fall Economic Update contained a number of important measures to address Canada’s competitiveness gap, the Chamber and many business leaders felt that it did not go far enough, or with enough urgency.
“Throughout our consultations, Canadian businesses are sensing that risks in the global economy are increasing, and that the potential for a significant event derailing global growth is definitely weighing on the minds,” said Dr. Trevin Stratton, Chief Economist for the Canadian Chamber. “Tariff increases by the United States and retaliatory measures by trading partners is affecting investor sentiment, smothering our growth prospects productivity. It’s leading to a lot of pessimism that we believe will manifest itself within Canada’s bottom line if action isn’t taken over the next year.”
The report sees a continued slowing in Canada’s economy, averaging out to 2% real GDP growth in 2019, a last gasp of mediocre growth before teetering towards anemic growth of 1.4% in 2020.
“Canada has some difficult decisions ahead because we have reached the end of the competitive runway, and we need serious effort to give our collective ability to grow our prosperity some lift. The consequences of failure here are simply too great,” said Perrin Beatty, CEO of the Canadian Chamber.
Mr. Beatty added that “we have the ability to control our own destiny, but it requires real, tangible action. The issue of regulatory and tax overhaul are no longer business issues, they are of national importance. With more announcements like today and continued suffering in the oil patch, these issues have the potential to dominate the next election cycle because of their impact on everyday Canadians. Fixing Canada’s competitiveness killers are now must-haves, not nice-to-haves.”
Key trends identified in the report include the accelerating pace of technological change, a growing economic divide, and the impacts of late-cycle growth in Canada. Based on these trends, the Chamber’s economic outlook and insight from Canada’s business community, the report outlines implications for businesses and policy makers to address challenges and better exploit opportunities.
Heading into 2019, Canadian business owners and leaders should be paying attention to developments in key areas such as pace of change, trade uncertainty, disparate regulatory regimes, cost of doing business, technological convergence, and cross-sectoral innovation, among others.
The report also outlines implications for Canada’s policy-makers, with a focus on areas such as fiscal sustainability, the need for a more digital government, more agile regulation, getting resources to market, next generation trade policy, and innovation boxes.
To read the – Crystal Ball Report – The Accelerating Pace of Change: Economic, Business and Policy Outlook for 2019 (December 2018) – click here