Canadian CEOs worry big changes are needed to stay viable

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Canada’s chief executives are growing increasingly concerned about the future of their businesses and are considering drastic changes to improve their long-term viability.

About 35 per cent of them are worried about their companies lasting for the next 10 years without making serious changes, up from 32 per cent last year and 24 per cent in 2023, according to an annual CEO survey by PricewaterhouseCoopers LLP.

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“The urgency comes not only from the latest challenges around tariffs and trade but also from the global megatrends, such as geopolitical tensions, technological disruption, demographic shifts and climate change, that continue to accelerate and are dramatically reshaping business and society,” the survey said.

Despite the apparent urgency, Canada’s chief executives are behind their global counterparts in making changes.

The survey said 46 per cent of Canadian execs are expecting to integrate artificial intelligence into their core business strategies, compared to 58 per cent globally, while 63 per cent say they’ve produced an innovative product in the past five years, compared to 72 per cent globally.

“While Canadian CEOs are more optimistic about economic growth than they were last year, they recognize the need to embrace AI and new technologies, invest in new sectors and reinvent their businesses,” Nicolas Marcoux, chief executive of PwC Canada, said in the report. “Despite the uncertainty around potential economic measures that could come into effect with the new U.S. administration, Canadian CEOs remain remarkably resilient and are preparing to take on the challenges ahead.”

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Given the uncertainty surrounding the North American economy, PwC recommends executives shore up their supply chains, make operational adjustments to their business and examine merger and acquisition options.

“Now is the time for leaders to proactively prepare for new trade relationships, potential protectionist policies and a shifting currency landscape,” the report said.

One such adjustment could be further integration of AI into daily operations. The survey said 79 per cent of Canadian executives plan to adopt generative AI in some form into their business over the next year, compared to 87 per cent globally.

Part of the apparent resistance may be that only 20 per cent of Canadian execs said AI increased their company’s profitability last year even though 39 per cent had expected it to change their bottom line.

It appears Canadian businesses are more interested in growing through acquisitions, with 58 per cent of executives planning at least one acquisition over the next three years, compared to 54 per cent globally.

PwC suggests execs should plan for the uncertain times by diversifying their business, embracing partnerships and planning for every scenario.

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“More broadly, it’s important for CEOs to consider the many opportunities available to transform, reinvent and, ultimately, increase the productivity of their businesses as we believe this is the best response leaders can have to the current trade challenges,” the report said.

“Ultimately, turning the tide on productivity growth in Canada will require policy measures, supports and investments by governments, but there’s also an important role for the private sector and organizations of all types to play.”

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With DeepSeek’s emergence as an AI threat and Alphabet Inc. on pace for the worst drop in more than a year on disappointing earnings, analysts are questioning whether the shine has worn off the Magnificent Seven.

The world’s top seven tech stocks have largely underpinned gains in the S&P 500 in recent years, but now their profit growth is slowing as spending climbs.

Trade tensions, geopolitical concerns and DeepSeek have added to the pressure on the group and forced some investors to look elsewhere, Bloomberg reports.

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Read more here.

• Today’s Data: Canada’s merchandise trade balance for December, U.S. ADP National Employment report for January
• Earnings: Novo Nordisk AS, Toyota Motor Corp, Walt Disney Co., Uber Technologies Inc., Suncor Energy Inc., Ford Motor Co.

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In times of uncertainty, every urge to make drastic financial changes must be avoided, Martin Pelletier writes. Instead focus on a well-thought out response to swift changes. Read more here.

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Calling Canadian families with younger kids or teens: Whether it’s budgeting, spending, investing, paying off debt, or just paying the bills, does your family have any financial resolutions for the coming year? Let us know at wealth@postmedia.com.

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Today’s Posthaste was written by Ben Cousins, with additional reporting from Financial Post staff, The Canadian Press and Bloomberg.

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