When you consider Canada's vast resources – metals, oil and gas, agribusiness, water, lumber and so on – in relation to our relatively small population, it's clear that we have the assets and capacity to be a major player in global trade for many generations to come.
Despite this, as a country we have often been economically insular, only producing a small number of significant global companies. Canada is primarily a middle-market economy, but with few middle-market companies operating on a global stage. The good news emerging from this quarter's C-Suite survey is that Canadian executives are becoming significantly more supportive of international trade, a clear difference from last year.
In last September's survey, we saw a decline in support for China as a priority trade partner, a trend that had become apparent over the previous two years. In a big shift, this quarter's report finds executives explicitly looking to open up trade relations with China, with a majority more likely to say Canada-China trade was too restrictive than to say it was just right or too open. There was also general support expressed for a bilateral Canada-China free-trade agreement.
Indeed, support for trade-related initiatives in general was widespread among respondents, with the idea of a North American common tariff or customs union seen as having the most potential to improve Canada's economic growth. Greater Canada-U.S. labour mobility and the Trans-Pacific Partnership (TPP) were also cited as important, and the strong prevailing feeling was that if pending TPP and Canada-Europe free-trade deals were not ratified, there would be a negative impact on Canada.
Executives agreed on the need to better educate the public on how past trade agreements such as the North American free-trade agreement have been beneficial and how they can continue to enhance our position when it comes to other global negotiations.
It is interesting that both presumptive candidates for the U.S. presidency have expressed opposition to the TPP (and, in some instances, aspects of NAFTA itself) yet almost none in the C-Suite think Congress and Canada's Parliament should abandon their work on the treaty. At any rate, it seems almost certain that NAFTA will survive and thrive, even if it is amended to reflect new measures enacted in the TPP, and Canadian executives remain fully on board with expanding trade on the global stage.
This overall optimism is further reflected in the fact that executives surveyed were twice as likely to say Canada's recent record-setting trade deficit is a temporary issue until commodities rally, as opposed to a structural, long-term problem. Indeed, that rally may already be under way, as oil seems to be stabilizing with the global oversupply situation coming to an end.
It's hard not to see the United States as being our greatest trading partner for a long time, but the world is getting smaller by the day, and Canada needs to be a much greater global player.
Willy Kruh is global chairman of consumer markets at KPMG Canada.