Industries hardest hit by high Canadian dollar differ on how to stay competitive

    TORONTO, Jan. 31 /CNW/ - Approximately four out of five (78 per cent)
companies in Canada's oil and gas sector, and three of every four
(75 per cent) companies in Canada's manufacturing sector were negatively
impacted by the higher value of the Canadian dollar, according to CAs who hold
senior corporate positions interviewed for the most recent CICA/RBC Business
Monitor (Q4 2007).
    According to the quarterly report, 43 per cent of the respondents in
Canada's manufacturing sector say their companies have increased business
development activity, while 32 per cent say their companies reduced prices in
late 2007. Meanwhile, in the oil and gas sector, more than half (53 per cent)
of the respondents indicated their companies have not attempted to combat the
negative impact of the rising Canadian dollar.
    "CA respondents make it clear that the appreciation of the Canadian
dollar continues to impact the competitiveness of companies across the
country," said Kevin Dancey, FCA, CICA president and CEO. "Depending on the
sector, other variables will have an impact on business decisions of CAs
serving in leadership roles. CAs in the oil and gas sector, for example, face
high drilling costs, increasing royalties and lower prices for natural gas."
    Another interesting finding from the report was the fact that only one in
five (21 per cent) of the respondents had taken advantage of decreased costs
due to the high dollar to purchase - or to plan to buy - capital goods.
    "In some sectors, concern over the outlook may be a reason for not
investing," noted Tracy Stevenson, vice-president of Business Financial
Services at RBC. "However, the 21 per cent who are leveraging this advantage
may well be the ones to grow, by capitalizing on a golden opportunity to
invest to increase their competitiveness."
    Nationally, average profitability estimates for the next 12 months across
all sectors dropped to +3.0 per cent, from +5.2 per cent in Q3. This decline
was most pronounced in the manufacturing sector, where average profit
estimates dropped to -0.3 per cent from +3.8 per cent, and in the oil and gas
sector, where average profit estimates dropped to +0.6 per cent from +5.8 per
    In the final quarter of 2007, CAs in senior executive positions were less
likely to be optimistic about prospects for their businesses over the next 12
months than over the previous two quarters. This decline was most apparent in
Alberta, with only 51 per cent expressing optimism in their businesses
compared to 79 per cent in Q2 of 2007. Just over half the respondents in
Ontario (55 per cent) and Quebec (56 per cent) expressed optimism for the
future 12 month prospects of their businesses, compared to 69 per cent
(Ontario) and 53 per cent (Quebec) in Q2. Optimism about 12 month business
prospects was highest in British Columbia with 67 per cent of B.C.'s
respondents expressing optimism, compared to 86 per cent in Q2.

    The CICA/RBC Business Monitor is issued quarterly, based on a survey
conducted by The Canadian Institute of Chartered Accountants (CICA). The
report draws upon business insights of CAs in leadership positions in
privately and publicly held companies across Canada. For this Q4 2007 report,
emailed surveys were completed by 610 CAs of 4,777 identified by CICA as
holding senior positions (CFOs, CEOs and COOs) in publicly or privately held
companies in Canada. The response rate was 13 per cent, with a margin of error
associated with this type of study at +/- 4.0 per cent, with a confidence
level of 95 per cent.

    The CICA/RBC Business Monitor (Q4 2007) is part of an international
initiative. The American Institute of Certified Public Accountants (AICPA) in
the United States and the Institute of Chartered Accountants in England and
Wales (ICAEW) in the United Kingdom also undertake quarterly studies that tap
the insights of members in senior positions to provide a barometer of economic
activity in their nations and as a basis for future comparative analysis
across countries. The CICA/RBC Business Monitor (Q4 2007) is available online

    About CICA

    The Canadian Institute of Chartered Accountants (CICA), together with the
provincial, territorial and Bermuda Institutes/Ordre of Chartered Accountants,
represents a membership of approximately 72,000 CAs and 10,000 students in
Canada and Bermuda. The CICA conducts research into current business issues
and supports the setting of accounting, auditing and assurance standards for
business, not-for-profit organizations and government. It issues guidance on
control and governance, publishes professional literature, develops continuing
education programs and represents the CA profession nationally and
internationally. CICA is a founding member of the International Federation of
Accountants (IFAC) and the Global Accounting Alliance (GAA).

    About RBC

    RBC delivers a wide range of financial services through a variety of
channels to individuals, small and medium-sized businesses and commercial
clients, including deposit accounts, investments and mutual funds, credit and
debit cards, business and personal loans, and residential and commercial
mortgages. It is the personal and commercial banking division of Royal Bank of
Canada (RY on TSX and NYSE).

For further information:

For further information: Interviews can be arranged with Kevin Dancey,
CICA president & CEO and/or selected CAs who responded to the survey, by
contacting: Tobin Lambie, CICA, (416) 204-3228 or c/o;
Interviews can be arranged with Tracy Stevenson, RBC vice-president, Business
Financial Services, by contacting: Kathy Bevan, RBC (416) 974-7622 or c/o

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