Economic optimism climbing but protectionist trade winds being felt: CPA Canada Business Monitor

TORONTO, May 12, 2017 /CNW/ - Optimism about the national economy is inching upwards among professional accountants in business leadership positions but there are concerns about trade attitudes south of the border, according to a new survey conducted for Chartered Professional Accountants of Canada (CPA Canada).

The latest CPA Canada Business Monitor (Q1 2017) finds that 38 per cent of the business leaders surveyed are optimistic about the prospects for the Canadian economy over the next 12 months, up from 32 per cent the previous quarter. In the first quarter a year ago, optimism stood at 22 per cent.

Those expressing a pessimistic outlook fell to 15 per cent in the opening quarter of 2017, down from 21 per cent in the final quarter of 2016. Forty-seven per cent were neutral in the most recent findings.

Protectionist trade sentiments in the United States are viewed as the biggest challenge to the Canadian economy, cited by 23 per cent of respondents. Oil prices come next referenced by 17 per cent of the survey participants.

"This quarter's results reinforce Canada's underlying economic momentum," says Joy Thomas, president and CEO, CPA Canada. "Uncertainty remains a constant shadow over the country's growth prospects because of trade and oil prices but the business leaders are not allowing themselves to be paralyzed by it as demonstrated by the climb in optimism."

Company specific

Business optimism sits at 58 per cent, compared with 54 per cent the previous quarter. These findings reveal how the survey respondents view the prospects for their own companies over the next 12 months.

Focusing on revenues, 69 per cent of the respondents are projecting growth over the next 12 months, compared to 65 per cent from Q4 2016. For profits, 63 per cent of those surveyed anticipate an increase, compared with 57 per cent the previous quarter.

Turning to employee numbers, 39 per cent of those surveyed predict growth at their company, similar to the previous quarter. Forty-three per cent of the respondents anticipate no change in employee numbers while 16 per cent expect a drop.

Tax Review

The latest CPA Canada Business Monitor finds that the business leaders surveyed clearly would welcome a comprehensive review of Canada's tax system. More than seven-in-ten (72 per cent) agreed that such as review is required.

"There has not been a thorough review of the country's tax system since the mid-1960s, and over that time incremental, ad hoc changes have obscured the underlying tax framework and its integrity," explains Thomas. "There is a pressing need to strip away those accumulated layers and re-calibrate our tax system to improve Canada's productivity, economic growth and international competitiveness."

While the latest federal budget outlines government plans to look at some tax measures, CPA Canada firmly believes a more comprehensive review is required. "One that cultivates the Canadian ideal of good business by focusing on both economic growth and social benefits," adds Thomas.

Methodology

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

For the Q1 2017 study, emailed surveys were completed by 485 of 5,392 identified by CPA Canada as holding senior positions in industry (CFOs, CEOs, COOs and other leadership roles). The response rate was 12.4 per cent, with a margin of error associated with this type of study at ±4.2 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 March 30 to April 18, 2017.

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

About CPA Canada

The new Canadian designation, Chartered Professional Accountant (CPA), is now used by Canada's accounting profession across the country. The profession's national body, Chartered Professional Accountants of Canada (CPA Canada), is one of the largest in the world with more than 210,000 members, both at home and abroad. The Canadian CPA was created with the unification of three legacy accounting designations (CA, CGA and CMA). CPAs are valued for their financial and tax expertise, strategic thinking, business insight, management skills and leadership. CPA Canada conducts research into current and emerging business issues and supports the setting of accounting, auditing and assurance standards for business, not-for-profit organizations and government. CPA Canada also issues guidance and thought leadership on a variety of technical matters, publishes professional literature and develops education and professional certification programs. cpacanada.ca

SOURCE CPA Canada

For further information: Tobin Lambie, Principal, Media, CPA Canada, Telephone: 416-204-3228, Mobile: 647-302-3761, tlambie@cpacanada.ca