Canadian Directors Remain Pessimistic About the Economy and Political Stability

Nov 20, 2019
 
Pessimism levels have remained static on both fronts for Canada, but worsened for the U.S. and at the global level

According to results released today by the Institute of Corporate Directors (“the ICD”), Canada’s board directors remain negative about the state of economic and political stability in Canada, the U.S. and across the globe. 
 
The ICD has been conducting its Director Lens survey twice annually since 2017 with the goal of tracking and comparing baseline results.
 
Current survey results show that almost half of director respondents (45 per cent) believe the Canadian economy will worsen over the next two- to five years and just 27 per cent say it will improve. These results are aligned with the spring 2019 and fall 2018 findings.
 
The outlook for the U.S. and beyond, however, is decidedly worse.
 
When compared to six months earlier, more directors are of the view that the U.S. economy will worsen over the next two- to five years – 61 per cent up from 44 per cent – as will the global economy – 62 per cent up from 45 per cent.
 
“I am not surprised that directors are concerned about the Canadian and global state of affairs,” said Rahul Bhardwaj, ICD President and CEO. “Trade uncertainty is continuing to deepen and protectionist policies are on the rise south of the border and around the globe. It stands to reason that unpredictable political decisions driven by nationalism and populism are causing senior organizational leaders to question economic health and stability here at home and abroad.”
 
Pressing Challenges
 
When asked what the most pressing challenges facing Canada will be in the next 10 to 15 years, directors responded as follows:
 
  • Workforce/human capital issues – 57 per cent;
  • Reliance on our natural resources – 52 per cent; and
  • An aging population – 51 per cent.
  
Pressing Risks
 
And the most pressing risks are as follows:
 
  • U.S. political instability – 58 per cent;
  • Sustainability/climate change – also 58 per cent;
  • Dependence on U.S. markets – 55 per cent.
 
Other Key Findings
 
The ICD’s Director Lens survey also finds that:
 
  • Directors increasingly feel that Canada has the right mix of knowledge and talent to compete globally in 10 to 15 years – 91 per cent, up from 76 per cent in the spring survey; and
  • More directors feel that the Canadian workforce is tech-savvy enough to build new businesses and create economic opportunities – 84 per cent, up from 73 per cent in the spring survey.
 
Despite this confidence in Canadian human capital, only two per cent of directors feel that Canada is adequately using its competitive advantages.
 
“This disconnect tells me that while Canada should be punching above its weight – consider our advantages in terms of resources, geography, education, technology and more – Canada’s senior leaders feel we are barely punching up to our weight,” Bhardwaj concludes.
 
“As a result, Canada is leaving much on the table.”
 
The ICD plans to explore specific reasons why directors feel Canada is failing to leverage its competitive advantages in its spring 2020 survey.
 
About the ICD
 
The Institute of Corporate Directors is a not-for-profit, member-based association representing Canadian directors and boards across the for-profit, not-for-profit, and Crown sectors. The ICD has more than 15,000 members and 11 Chapters across Canada and fosters the sharing of knowledge and wisdom through education, professional development programs and services, and thought leadership. ICD members across all sectors of the economy oversee well in excess of $1 trillion in market capitalization and institutions that impact the lives of virtually every Canadian.

About the Survey
 
This survey was conducted by Environics Research with 966 board directors between September 10 – October 4, 2019, yielding a higher than usual response rate of 7.0 per cent overall. A sample of this size produces results that are considered accurate to within +/3.1 percentage points, 19 times out of 20.
 
Media Contacts
 
Annie Smith
Director, Communications and Public Affairs

T: 416.593.7741 x 244
M: 416.768.7711
Email: ASmith@icd.ca

Prasanthi Vasanthakumar
Manager, Communications

T: 416.593.7741 x 310
Email: PVasanthakumar@icd.ca
 

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