NAFTA uncertainty weighing on Canadian business confidence: EDC
More than one-quarter of survey respondents said to be considering moving operations to U.S.
Export Development Canada said Friday that 23 per cent of Canadian exporters surveyed recently say the ongoing NAFTA negotiations are having a negative impact on their operations.
The figure is contained in the latest release of EDC's semi-annual trade confidence report, which found that Canadian exporters' overall confidence in domestic and international sales opportunities over the next six months was down only slightly from the spring despite a weaker Canadian dollar and softer merchandise exports.
Canadian businesses are feeling "a little colder towards exporting," EDC said.
U.S. President Donald Trump's administration has taken a hard line on the NAFTA renegotiations, which, thus far, have failed to produce an agreement after several rounds of talks.
EDC said of the Canadian business that reported NAFTA was having a negative impact on their Canadian operations, 26 per cent were contemplating moving operations inside the United States to avoid potential border disruptions, while 23 per cent said they would attempt to diversify their exports or investments into markets outside of North America.
Some survey respondents also indicated they were delaying or cutting their levels of investments and employment in response to concerns of the status of NAFTA.
"While companies aren't necessarily panicking, we found that almost one quarter of Canadian exporters said that the on-going NAFTA renegotiation was having a negative impact on their Canadian operations and they already are or plan to implement strategies to mitigate this," EDC chief economist Peter Hall said in a release.
Bank of Canada governor Stephen Poloz told a Toronto audience on Thursday that NAFTA concerns have been a persistent issue that is holding back some investment.
The EDC's trade confidence report is based the results of a telephone survey conducted between Oct. 2 and Oct. 25, with a sample size of 746 Canadian businesses.