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Shrinking Margins, High Dollar and Attracting Talent Top List of Worries for Canadian Business Leaders
Miller Thomson LLP survey reveals Canadian executives are looking to customers not governments for answers
TORONTO, October 11, 2011 –When asked what issues are most likely to keep them up at night, Canadian business leaders rank profitability, a high Canadian dollar and attracting talent at the top of their list of worries, according to a new national survey conducted by business law firm Miller Thomson LLP. The vast majority of Canadian executives also say they look to customers when making business decisions, believing that federal and provincial governments are only marginally capable of solving the country’s most pressing issues.
“What we are hearing from Canadian business leaders is that external economic forces are clearly taking a toll on corporate bottom lines,” said Gerald Courage, Chair, Miller Thomson LLP. “There is no doubt that a high Canadian dollar has been a major factor, so it is reassuring to see some recent relief in this area.”
The survey, conducted in the second half of August, polled 200 senior business executives from a broad spectrum of the Canadian economy, including manufacturing, financial services, retail, forestry, agriculture and mining. Respondents were asked to share the issues that most concern them, who has the most impact on their business decisions, and how much confidence they have in federal and provincial governments to address their concerns. The Miller Thomson survey is the second time in less than a year that the firm has reached out to Canadian executives to measure their point of view on current business issues.
“This is the second time in less than a year that we have reached out to Canadian executives to measure their progress and point of view during this very volatile economic period,” said Courage. “The evolving picture is of anti-protectionist, independent-minded business leadership that is listening carefully to the market, rather than looking to government to solve their problems.”
The national survey also polled business executives on which areas they would likely turn to for legal advice. A majority (73 per cent) identified labour and employment law as the area in which they are most likely to need legal advice over the next 12 months.
“There are labour and employment implications in virtually every area of business, from mergers and acquisitions, to downsizing, outsourcing, joint ventures and partnerships, so it’s not surprising that it ranked as it did among business executives,” said Gita Anand, Partner at Miller Thomson and Co-Chair of the firm’s Labour and Employment Group. “Canada’s increasingly diverse and specialized workforce has also put pressure on businesses as they try to attract and retain good talent.”
In the first half of 2011, Miller Thomson participated in 19 equity financings, placing them at the top of Canadian law firms in terms of deal flow. Miller Thomson’s Mergers and Acquisitions work earned the firm fourth place by deal value, and fifth for deal volume among all Canadian law firms by Thomson Reuters. The firm also achieved top ranking as one of only two Canadian law firms to appear in FactSet’s top 50.
Mergers and acquisitions and tax law ranked top among the areas respondents are most likely to turn for legal advice in the next 12 months (57 and 56 per cent respectively). This was followed by litigation (55 per cent), intellectual property protection (33 per cent), succession planning (31 per cent), and environmental law (28 per cent).
“Miller Thomson has seen a strong 12 months of M&A activity, but a substantial amount of market uncertainty has developed over the past couple of months. This tends to have a chilling effect on new deal activity as buyers are more selective in their targets,” said Jay Hoffman, Partner and Chair of Miller Thomson’s National Securities, Capital Markets and Mergers and Acquisitions Group. “It is very encouraging to see that, despite current economic uncertainty, more than half the executives we polled expect to seek legal advice on M&As over the next 12 months.”
Miller Thomson’s national survey was conducted exclusively for Miller Thomson LLP by Research House. A sample of 200 senior and C-level executives were surveyed 157 males and 43 females). With a sample of this size, the results are considered accurate to within ± 6.9 percentage points, 19 times out of 20. The largest number of respondents come from Manufacturing and Construction (30 per cent), followed by Services (23 per cent); Retail and Wholesale Trade (14 per cent); Transportation, Communications, Technology and Utilities (13 per cent); Finance; Insurance and Real Estate (10 per cent); Mining, Oil and Gas, Exploration (7 per cent); Agriculture, Forestry and Fisheries (3 per cent); and Education, Health and Public Administration (1 per cent).
For details, please refer to the survey highlights below.
About Miller Thomson
Miller Thomson LLP is a national business law firm with more than 470 lawyers working from 11 offices across Canada. The firm offers a complete range of business law, advocacy and personal legal services. Miller Thomson works regularly with in-house legal departments and external counsel world-wide to facilitate cross-border and multinational transactions and business needs. Miller Thomson offices are located in Vancouver, Calgary, Edmonton, Saskatoon, Regina, London, Kitchener-Waterloo, Guelph, Toronto, Markham and Montréal.
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- Shrinking margins was ranked the top issue of concern among Canadian business leaders (42 per cent), followed by an inability to attract talent (22 per cent)
- The majority of executives (70 per cent) identified their customers as having the most impact on their business decisions, well ahead of competitors (13 per cent), government regulation (7 per cent), and government policy (4 per cent)
- A high Canadian dollar was ranked the top issue of concern among Canadian business leaders (31 per cent), followed by financing an aging population (20 per cent), and Canada’s national debt (14 per cent)
- The majority of executives (77 per cent) have limited confidence that Canadian federal and provincial governments are equipped to solve these issues
- Labour and employment law was ranked as the top area business leaders expect to turn to for legal advice in the next 12 months (73 per cent) This was
followed by mergers and acquisitions (57 per cent), tax law (56 per cent), litigation (55 per cent), intellectual property protection (33 per cent), succession
planning (31 per cent), and environmental law (28 per cent)
- Business executives in Canada’s mining, oil and gas, and exploration industries, finance, insurance and real estate industries were most likely to turn to legal
advice for mergers and acquisitions over the next 12 months (both at 79 per cent)