Canadian companies have been caught up in a frenzy of mergers and acquisitions over the past couple of years, with many prominent names being taken private (BCE) or sold to foreign entities (Inco, Cognos). That has caused some people to mourn the lack of entrepreneurial spirit in Canada, and has created fears of returning to a branch plant economy. Whether or not such fears are warranted, a web poll of 148 Canadian CEOs conducted by Compas Inc. shows that business leaders are nearly unanimous in terms of what needs to be done to ensure the success of our companies.
The poll is in response to a speech given by Thomas d’Aquino, president and chief executive of the Canadian Council of Chief Executives, on November 21 at an executive forum in Toronto. D’Aquino stressed the importance of entrepreneurial risk-taking in the business community. The poll respondents strongly agreed that more value should be placed on risk-taking, to the extent that our education system should incorporate lessons on the subject.
The need to become a destination for head offices, even for companies whose major shareholders are not Canadian, was another important theme. Accomplishing such a feat involves changes to both our tax system and our policies toward securities regulation, the CEOs believe. “If dividends were exempt from taxation, whether the recipient was Canadian or foreign, we’d see much more investment,” wrote one. Equally as important is strengthening our regulatory regime, which many view as weak. “If we can get the right balance between reporting requirements and checks of integrity, we will do well as a corporate headquarter base,” wrote another respondent.
D’Aquino lamented the loss of many prominent Canadian businesses, particularly in the resources sector, and said such changes present “real risks to our country.” While the CEOs agreed with the statement, most were slightly less concerned about it than d’Aquino is. Canada faces other challenges internally, after all, and one CEO expressed skepticism at the prospect of becoming global business leaders until we can stop our provincial squabbling. “The provinces can’t even agree on worker mobility, a single securities regulator, or professional standards,” the respondent wrote. “International business will certainly shy away from the provincial-federal dynamics that currently exist here.”