The insider view: Canada: FM examines how business is conducted in countries around the world, with local experts acting as business guides.
| Author | Ratnayake, Amal |
| Position | INFORM |
BUSINESS ENVIRONMENT
Canada escaped the worst of the 2007-08 financial crisis but, as a relatively small and open economy, it does remain vulnerable to changes in global trade patterns, according to Perry Sadorsky, associate professor in the Schulich School of Business at York University, Toronto.
"The financial crisis affected global trade, which hit Canada's export sector," he says. At 7.1 per cent, the unemployment rate today is higher than the 6.1 per cent recorded in 2008. Since the crisis, job creation has been sluggish, with most new employment being created in the private sector. Job quality is a concern, because some of these new jobs are not high-paying full-time roles with benefits."
Although retail sales and the real-estate market have both held up well since the crisis, one concern is that Canada's household credit-market debt is currently at a record high of 163 per cent of disposable income, Sadorsky reports.
"Real GDP is expected to grow by 1.7 per cent this year and 2.3 per cent next year. These economic growth forecasts are similar to those for the US, but higher than those for the euro area. Slower growth in emerging economies and the US is affecting the demand for Canadian exports of natural resources," he says.
The Canadian economy is very sensitive to what happens in the US. It's our biggest trading partner, with 80 per cent of our exports heading south," says Ranil Mendis, FCMA, CGMA, chair of branding and public relations for CIMA Canada. "That said, our resource-based economy proved its mettle during the financial crisis. No Canadian bank came anywhere close to needing a bailout. Like it or not, our federal government's superior regulatory approach played a big part in that. Canada can still boast about being the country that best handled the crisis."
Nevertheless, the collapse of GM and Chrysler--two big US car makers with factories in Canada--did force the federal and provincial governments to intervene financially to prevent mass redundancies, notes Martin Buckle, FCMA, CGMA. a consultant and former treasurer at Rio Tinto.
MANAGEMENT CULTURE
CANADA IS A LITTLE MORE laid-back than the US and indeed many other countries, according to Dave Woolley, FCMA, CGMA, vice-president of finance at Shandiz Foods.
"Canadians can be fierce competitors, but generally they compete in a very gentlemanly fashion--pistols at dawn rather than a knife in the back in a dark alley," he says. "And the willingness to co-operate across...
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