Inflation, Supply Chain Top Growth Challenges

Inflation and supply chain concerns are the top two challenges to the growth of the Canadian economy cited by business leaders, says a survey for the Chartered Professional Accountants of Canada (CPA Canada). Its ‘CPA Canada Business Monitor (Q1 2022)’ shows 40 per cent of respondents were optimistic about Canada's economic prospects over the next 12 months, compared to 43 per cent in the fourth quarter of 2021. However, pessimism jumped sharply from 19 per cent that quarter to 29 per cent in the first quarter of 2022. Inflation (22 per cent) and supply chain issues (20 per cent) were seen as the top challenges to the growth of the Canadian economy in the coming 12 months, with lack of skilled workers (11 per cent) and employee recruitment, retention, and development (10 per cent) next on the list. Worries about the effect of COVID-19 dropped sharply, with the number of respondents who are either extremely or very concerned about the economic impacts of the pandemic falling to 10 per cent in the first quarter, well down from 37 per cent in the final quarter of 2021. Respondents report that their organizations are recruiting and retaining employees by using tactics like increasing compensation (68 per cent), hybrid working arrangements (50 per cent), and improving work-life balance options (50 per cent). They think the federal government could help increase the number of skilled employees in Canada by supporting worker training (53 per cent) and increasing immigration levels for people in job categories that are in demand (51 per cent). They are also looking for government action to reduce the impacts of climate change. More than half (57 per cent) of the business leaders surveyed agreed that the federal government should focus on mitigating climate change versus 24 per cent who disagreed and 19 per cent who took no position.