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Oil, Uncertainty inciting pessimism for Canada’s economic outlook among CPAs

By Katherine Rizzi |

With the Canadian dollar slipping to its lowest point since 2003 last month, it comes as no surprise that Canadians’ outlook for the economy is quite gloomy.


Last week the CPA Canada Business Monitor released its results of a survey conducted in Q4 of 2015, on behalf of Chartered Professional Accountants of Canada (CPA Canada). A total of 512 CPAs in leadership positions (i.e. CFOs, CEOs, COOs) completed the quarterly survey.  

The survey revealed that half of the CPA respondents were pessimistic about how the national economy will perform over the next 12 months.  This was an increase from the previous quarter where 40 per cent of CPAs surveyed felt pessimistic about the Canadian economy’s projected performance. Additionally, compared to Q4 of 2014, the level of pessimism increased by 31 per cent overall.

The level of optimism felt in the Canadian economy also experienced a significant shift. According to the CPA Canada Business Monitor survey, optimism decreased by 20 per cent in Q4 2014 to Q4 2015, from 33 percent optimism to just 13 per cent optimism, respectively.

Results of the survey showed that the identified top challenge to the growth of the Canadian economy is oil prices, as cited by 39 per cent of CPA respondents. The next top challenge, as identified by 21 per cent of respondents, is the overall uncertainty around the Canadian economy. Other top challenges identified included: the state of the global economy, Canada’s export levels, the state of the U.S. economy, the current level of the Canadian dollar, and consumer confidence.

The survey also probed “company-specific” questions, specifically around projected change in the following year.

A total of 51 percent of respondents project an increase in revenue within their company over the next year, however, only 10 percent of those project that increase to be higher than 10 percent, while 23 percent project an increase of less than 5 percent overall. Thirty-four percent of respondents project a decrease in their company’s revenue.

The survey results showed that 48 percent of the respondents project an increase in profits over the next year, with 11 percent of those expecting the increase to be by over 10 percent and 20 per cent of those expecting the increase to be by less than 5 percent. While 36 percent project a decrease in profits over the next year, 14 percent project no change.

The survey also reported on the projected change in employees over the next year. According to the survey, 31 percent of respondents expect to add employees in 2016. Almost an equal number of respondents expect to decrease their number of employees, at 30 percent. Thirty-eight percent expect no change in their number of employees.  

According to the survey results, increasing sales within Canada is the top priority of respondents’ companies for 2016, at 25 percent. Rounding out the top 5 priorities identified by the respondents are: reducing costs (18 percent), improving productivity (12 percent), retaining customers (8 percent), and increasing sales to the U.S. (7 percent).

CPA Canada issues the CPA Canada Business Monitor at the end of each quarter to report on the insights of professional accountants in leadership positions in privately and publicly held companies. 

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