New survey shows strong confidence that industry can mitigate trade war impact
There are just a few days before President Trump’s tariffs are imposed on imports from Canada, but business leaders from one major sector believe they can weather the storm.
Canada’s energy and natural resources (ENR) CEOs have been surveyed by KPMG in Canada and 80% of respondents are confident that their businesses can withstand a trade war, even if it is sustained beyond one year.
Although just 2% said they could not survive in that scenario, a further 18% warned that a trade war of a year or more would lead to significant profit losses.
When compared to responses from a broader mix of Canadian CEOs, where 67% were confident in withstanding a sustained trade war, 30% warning of significant profit losses, and 3% facing wipeout, the poll reveals the resilience of the ENR sector.
But there’s a caveat. The ENR leaders are urging policymakers to cut provincial red tape and create a national infrastructure building program to boost the economy and protect Canada’s sovereignty. Nine in ten respondents said this was essential for their survival.
"This crisis provides Canada with a real opportunity to nation-build – a once-in-a-lifetime chance to strengthen our economy and our sovereignty by taking full control of our abundant energy and natural resources," says Shane Doig, Partner and National Energy and Natural Resources Sector Leader, for KPMG in Canada. "If we are going to build these projects, it's important that all levels of governments – federal, provincial, municipal, and Indigenous – work together to ensure that much-needed West-East-North infrastructure can be built that brings benefits to all regions of the country.”
Almost nine in ten ENR respondents believe it's time for Canada to build West to East pipelines to reduce reliance on moving Canadian oil and gas to the US and then to Eastern Canada.
Retaliatory action
Most ENR leaders (86%) believe that Canada should fight US tariffs with retaliatory measures, in line with the view among all business leaders polled.
Despite their resilient tone, ENR leaders tend to be more concerned than the wider business leader population about some of the impacts of the trade war:
- 83% are extremely or very concerned about losing customers to US competitors (vs. 80% among all respondents)
- 85% are extremely or very concerned over managing prices and margins with customers (same among all business leaders)
- 80% are extremely or very concerned about supply chain disruptions (same as in the larger survey)
However, around eight in ten ENR leaders said the low Canadian dollar will partially or fully offset tariff costs with 12% saying they be in a net positive position; 8% will not be helped by a weak loonie; and 3% are unsure. Among the wider poll cohort, 67% said the weaker loonie will help them offset tariff costs to at least some degree.
