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Executives split on low oil prices 

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This quarter’s c-suite survey [PDF 344KB] shows an almost 50/50 split between business leaders who say low oil prices will have a negative impact on their bottom lines and those who say it’s not likely to affect their balance sheets in a significant way.

Executives expect 2015 will be difficult for Canada’s oil patch. In the oil and gas sector, 70% of executives feel it will hurt their business. In Canada’s western provinces, declining oil prices are likely to be felt the most. Oil and gas royalties account for a good portion of Alberta’s provincial revenue and according to the Alberta government, every $1 drop in oil prices produces a corresponding $215-million reduction in provincial revenue over a 12-month period.

 

On the Canadian economy for the coming year, expectations have taken a sharp turn south. For the first time in two years, more than 20 percent of surveyed executives expect the Canadian economy to decline somewhat over the next 12 months.

Top Highlights

Oil Prices

  • Few expect the price for North American crude to return to $100 a barrel in 2015. The expected range is $70-$80 a barrel.
  • Nearly three in four, including most resource company executives, agreed that Canada’s economy is too dependent on high prices for oil.

 

The Economy

  • More than 20% of executives expect the Canadian economy to decline somewhat, contrasting the expectations for the US economy where 25% of executives expect to grow strongly in the next 12 months.
  • Vast majority expect the Canadian dollar to stay at or below 90 cents to US.

 

National Priorities

  • The c-suite believes that the federal government should be focused on growing the economy, focusing on increasing productivity, increasing GDP growth, expanding trade, and more full-time employment.
  • Tax cuts are thought to be the most helpful things the government could introduce to help their businesses, according to the survey

 Contact

Willy J. Kruh

Willy J. Kruh

Global Chairman, Consumer Markets

416-777-8710

Michael T. McKerracher

Michael T. McKerracher

National Energy Leader

403-691-8056

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