According to the survey, conducted by Angus Reid, SMEs overwhelmingly state that the Canadian economy must become more globally competitive, with 73 per cent of SMEs opining that Canadian businesses should disregard the current strength of the loonie and put more resources into international trade.
In addition, almost two thirds are concerned that Canada continues to maintain an international trade deficit and an equal number believe the government should either abolish all tariffs between Canada and other nations or provide tax incentives to export-based businesses to stimulate global trade. This is a strong departure from the previous quarter when 40 per cent of SMEs believed businesses should confine their commerce within Canada in order to sustain the country’s competitiveness, and 51 per cent who stated Canada should establish tariffs to discourage overseas exporters from accessing the Canadian market.
New data released from a UPS survey conducted by Leger marketing shows the numbers corroborate data from previous phases of the study that showed almost 40 per cent of small to medium-sized enterprises (SMEs) believed they should confine their commerce within Canada in order to sustain the country's currently strong level of competitiveness, and that 51 per cent believe Canada should establish tariffs to discourage overseas exporters from accessing the Canadian market.
"While it is inspiring to see that Canadian businesses are so inclined to support their compatriots, it is also a bit of a red flag," said Pat Stanghieri, vice-president of Marketing, UPS Canada. "The reality is that competing businesses based in other countries - including the United States - are leveraging the lower cost of goods and labour in emerging economies to achieve competitive price advantages.”
Newly-released data from a UPS survey conducted by Leger Marketing shows that small to medium-sized enterprises (SMEs) are still hesitant to engage in international trade, despite the vast opportunities in the worldwide marketplace.
In part two of its three-part series to study SME's global trade habits and attitudes, the survey, commissioned by UPS Canada, revealed that 52 per cent of SMEs would not take advantage of a free-trade deal with the EU — not because it's with the EU, but because they have no interest in engaging in trade activity at all.
UPS Canada President Mike Tierney said the results are not surprising, but do present a concern about the future economic competitiveness of Canada's businesses. "Given the turmoil taking place in the U.S. and European markets and much talk about the possibility of a double-dip recession, it's understandable that many SMEs are reluctant to invest in expanding their enterprise beyond Canada," said Tierney. "However, it's very important that Canadian SMEs realize that in order to remain relevant and competitive in the future, they should leverage the economic opportunities emerging in overseas markets."
The UPS Canada survey conducted by Leger Marketing arrives on the heels of provincial approvals across Canada to move forward with an EU trade agreement that is projected to boost Canada's GDP a full percentage point.
The survey shows only seven per cent of businesses would closely tie Canada's economy to Western Europe, and one per cent to Eastern Europe. Conversely, one in five SMEs say they would prefer Canada to closely tie its economy to rising economic star China, with which Canada has had increasingly cool relations in recent years due to disagreements in the political arena.
"There is a reason the federal government is putting so much effort into the establishment of a trade agreement with the EU," said Mike Tierney, UPS Canada President. "There is a wealth of short- and long-term opportunity for Canadian businesses looking to expand internationally to do so within the European market. The disparity in currency value between the loonie and euro provides Canadian exporters the opportunity to garner much more interest in Europe than in the United States."