Canadian CFOs fret about Europe, pipelines: poll

Thu Jun 28, 2012 12:10am EDT
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By Louise Egan

OTTAWA (Reuters) - Europe's debt crisis and concerns about environmental policy and its impact on projects such as the stalled Keystone XL oil pipeline dampened Canadian business confidence in the second quarter, according to a Deloitte survey of chief financial officers.

The mood was nonetheless far more upbeat than in the United States, where unemployment topped the concerns of large corporations, a trend that has lasted several quarters.

The survey, released on Thursday, showed that "net optimism" among Canadian CFOs - the difference between those more optimistic for their own company and those less optimistic - stood at +42 in Canada, down from +57 in the first quarter.

"Our view is that this is a reflection of everything that we read about and hear about primarily in the euro zone and continued concerns in that part of the world," said Trevor Nakka, co-leader of Deloitte Canada's CFO program.

By contrast, the balance of opinion fell to zero in the United States and the average across North America - the United States, Canada and Mexico - was +11, compared with +48 last quarter.

Because Canada's economy is heavily reliant on oil and gas extraction, mining, and other resource industries, senior executives identified issues affecting those sectors as their biggest concern. Sixty-three percent said environmental policy and regulation was among the top three economic challenges.

"There's potentially some level of concern that is emanating possibly from the oil and gas sector ... about the mood around environmental policy with issues like Keystone XL and the proposed Gateway project," Nakka said.

"Those are not specific things that we can point to but our sense is that those are likely things that are being projected."   Continued...