Canadian firms feeling sunny on trade: poll

‘Business as usual,’ EDC economist says

Canadian companies are feeling optimistic when it comes to trade, according to a new report from Export Development Canada, despite some concerns about the rise of global protectionism and ramped up anti-trade rhetoric south of the border.

The Trade Confidence Index, an EDC survey released Thursday that measures Canadian exporters’ level of confidence and expectations of trade opportunities over the next six months, jumped by 1.6 points from 72.3 last autumn to 73.9.

EDC vice-president and chief economist Peter Hall said the results are surprising, given a range of factors including the upcoming renegotiations of NAFTA, a potential border tax and ongoing trade disputes, such as the softwood lumber spat.

“These are the kind of things that normally throw businesses into turmoil. When companies don’t know where to go because these strategic anchors have been pulled on them, you expect them to respond to a survey like this with much lower confidence levels,” Hall said. “That’s not what we saw.” While a 1.6-point increase is not normally considered a substantial jump, Hall said it is significant given the potential policy changes that may impact Canadian exporters, as well as the anti-trade rhetoric coming from the Trump administration.

“When you juxtapose this with what’s going on out there, it’s a remarkable result,” he said.

According the EDC report, 47 per cent of businesses surveyed cited the main reason world economic conditions may worsen over the next six months as global instability, up from 36 per cent in the spring. The next most significant factor was uncertainty as a result of the U.S. election, which increased from 36 per cent in the fall to 39 per cent.

Meanwhile, 22 per cent of businesses said the most significant factor needed for economic conditions to advance was improvements to the U.S. economy, a substantial increase from just eight per cent in the fall. Of the firms surveyed, 95 per cent reported they expect export sales to remain the same of improve over the next six months.

“Companies are optimistic that business flow is either going to continue or increase over the next six months because they haven’t seen a fundamental interruption to the demand for their product,” Hall said.

“All this talk is going on, but it’s business as usual and when we look stateside we can see clearly in the numbers that there’s been a rampup in growth.”

Hall said export performance on a year-to-date basis as of April has grown by 8.5 per cent when compared to the same time last year, above the EDC’s annual forecast of six per cent.