Productivity improvements top CEOs’ wish list: Gandalf Group

Chief executives from some of the country’s top 1,000 companies want the new federal government to focus on ways to improve Canadian productivity and competitiveness, according to a new survey from Ottawa-based Gandalf Group. The results form the basis of the consulting and research firm’s C-Suite Quarterly Survey, released on March 20. Enhancing Canada’s productivity and competitiveness has been a hot topic of late and was the subject of a conference in Ottawa last year that focused solely on exploring ways for the country to close the gap between Canada and the economic output of our closest neighbour, the United States. There, many called for a national strategy promoting the adoption of information and communications technologies (ICTs) by small- and medium-sized businesses. A key component of economic competitiveness and improved productivity is the availability of a skilled workforce, so it doesn’t come as much of a surprise that CEOs of the surveyed companies place a high priority on education and training (see chart on page 1 for more on policy objectives). Speaking at the Economic Club of Toronto, Gandalf Group partner David Herle highlighted this fact. "Their biggest concern is the ability to find and keep enough skilled workers, a view consistent with recent studies of the labour market. It is notable that the number one policy objective of executives – namely education and training to deal with labour shortages – is not among the federal government’s current five highest priorities," he said. Another result to emerge from the survey is that Canadian executives are concerned about a potential negative impact on the Canadian economy resulting from an economic downturn in the United States. Despite this fact, executives aren’t yet ready to expand our list of trading partners to the Asia-Pacific region with free trade agreements. Herle says this is a mid to low-level priority, and larger companies are wary about additional free-trade deals in that part of the world. "There is little enthusiasm for our government to rush into free trade agreements in the Asia-Pacific region in the hope of expanding into new markets," Herle noted. "Our executives are much more intent on seeing government policy focusing squarely on enhancing Canadian productivity and competitiveness. This would further explain the emphasis executives place on training and education, as well as meaningful tax reform." Tax reform is seen by many as an integral component of a strategy to improve economic productivity and competitiveness. On this front, Herle said, Canadian companies want a tax policy that "spurs productivity gains…more than they are looking for tax policy to stimulate consumer spending, such as reducing the GST." The Gandalf Group also asked executives what they thought of reducing foreign ownership restrictions on telecommunications carriers. There aren’t many, according to the survey, who believe this should be a high policy priority for the federal government. Overall, only 13% of those surveyed said reducing foreign ownership limits should be a high priority. This level doesn’t change markedly when looking at the results on a regional basis, except for Eastern Canada where only 4% believe this to be a high priority.

Productivity improvements top CEOs’ wish list: Gandalf Group

News | March 29, 2006

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