The decline of Canada’s manufacturing sector remains a top concern for the country’s business leaders, even more so than the risk of serious fallout from U.S. economic troubles. The results were found in a web poll of 132 leaders of Canadian companies conducted by COMPAS Inc.
Almost half of the panel believes Canada is less susceptible to a U.S. economic downturn than the country has been in the past, while 33% said there has been no change. “Maybe this time we are lucky due to the high price of energy, and we’ll be able to manage better,” wrote one respondent. “However, the amount of damage in the eastern provinces could be irreparable.”
The source of much of that damage is, of course, the weakening manufacturing sector, and nearly 80% of the CEOs said they believe this problem will ultimately harm the rest of Canada. “The job losses we are seeing in the manufacturing sector are the direct result of our manufacturers having become complacent and failing to invest in technologies that would make them competitive on the world stage, compounded by their overpaying the labour component,” wrote one CEO.
The worsening situation is also leading to change in sentiment among the panel about government intervention. Generally, the respondents have opposed government meddling, but the problems in manufacturing are so great that a slight majority (51%) would welcome help from the feds.
The panelists don’t seem to favour anything too drastic, however. Almost half of the respondents say the most effective move the government can make is to cut taxes, followed by boosting investments in innovation. Slightly more than 10% of the CEOs said the feds should do nothing. “Government should facilitate the solutions. They are not the solution,” wrote one.
“[Prime Minister Stephen] Harper’s doing the right thing by staying out of this. The auto sector, as an example, needs to adjust to longer-term operating conditions within North America,” wrote another CEO. “If the government bails out industry every time we have an economic downturn, we put increased pressure on government spending and potentially get back into deficits, which create many other issues for all Canadians.”