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From optimism to opportunity

24th CEO Survey—Canadian insights

At a glance

Canadian CEOs are optimistic about the year ahead, with 72% expecting the global economy to grow over the next 12 months. Moving forward, it’s important to turn this optimism into opportunity.

Companies have needed to adopt digital tools faster than ever before. As a result, cybersecurity has moved to the top of the list of extreme threats, followed by the pandemic and other health crises.

Too few Canadian CEOs, especially those from private companies, are concerned about climate change. Organizations of all sizes must build ESG into their investment and risk-mitigation strategies to sustain long-term growth.

To support the anticipated growth, most CEOs expect to boost their headcount this year. And the pandemic has focused Canadian CEOs’ minds on the well-being of their people.

Setting priorities that will outlast the bounce

Canadian CEOs are anticipating immense growth in the coming year—but they’ll need to position themselves for long-term success by focusing on and investing in key priorities. Conducted in January and February 2021, with a record level of Canadian participants, our insights from the 24th CEO Survey explore the views of 337 chief executives from across Canada. Insights reveal how they’re reinventing their companies and ensuring sustainable growth. It’s time to use the energy of a rebounding economy to strengthen your strategies around transformation, cybersecurity and privacy, climate change and workforce to sustain growth beyond the bounce.


Canadian CEOs believe global economy will grow over the next 12 months

p831624-ceo-believe-economy-growth-v2

Bouncing back with optimism

Between 2018 and 2020, CEOs’ sentiment about the prospects for economic growth had become steadily pessimistic, hitting an all-time low last year (even though the survey was conducted prior to the COVID-19 pandemic). This year, sentiment has rebounded, with 72% of Canadian CEOs expecting global economic growth to improve over the next 12 months. They’re also bullish about their own organization’s growth, with most expecting their organization’s revenues and profitability to increase. From an industry lens, consumer markets were hit hard by the pandemic, so their CEOs were most cautious about growth prospects for 2021.

Coming from the shock of 2020, it’s arguable a bounce-back was inevitable, especially as vaccines roll out and certain markets begin to reopen. It may also show the resilience businesses have demonstrated in the past year is translating into confidence about the future. But confidence doesn’t equal strategy, so it’s important CEOs turn their optimism into opportunity

Activities to drive growth in the next 12 months


Canada
Global

Pursue organic growth
%
%
Seek operational efficiencies
%
%
Launch new product or service
%
%
Form new strategic alliance or joint venture
%
%
Pursue new M&A
%
%
Enter a new market
%
%
Collaborate with entrepreneurs or startups
%
%
Sell a business
%
%

Investment priorities over the next three years


Decrease 3%+
Increase 3–9%
Increase 10%+
Leadership and talent
%
%
%
Digital transformation
%
%
%
Cybersecurity and data privacy
%
%
%
Initiatives to realize cost efficiencies
%
%
%
Organic growth programs
%
%
%
R&D and new product innovation
%
%
%
Advertising and brand building
%
%
%
Sustainability and ESG initiatives
%
%
%

Seize your opportunity for growth

Make your business fit for the future, because the time for transformation is now. With Canadian CEOs looking forward with positivity, most are focused on organic growth and operational efficiencies as activities to drive growth in the next year. Canadian CEOs also plan to focus their long-term investments here for the next three years, in areas including digital transformation (71%), initiatives to realize cost efficiencies (68%) and organic growth programs (60%).

Given our current economic and social realities, many organizations have had no choice but to accelerate their transformational goals. Rapidly changing market dynamics have impacted everything we do—including the way we buy products and interact with organizations. Organizations now have an opportunity to leverage their strategic investments in digital transformation and to differentiate themselves in meaningful ways, like how they engage with customers and reimagine the employee experience. And strategy requires expertly coordinated execution to drive sustainable growth and profitability, and help organizations thrive long after the crisis.

Threats to growth in Canada


Extremely concerned
Cyber threats
%
Pandemics / other health threats
%
Over-regulation
%
Misinformation
%
Increasing tax obligations
%
Policy uncertainty
%
Uncertain economic growth
%
Tax policy uncertainty
%
Availability of key skills
%
Climate change / environmental damage
%

Fit for Growth

Make strategic choices to drive transformative performance improvement

Are you investing your limited resources on the capabilities that help you differentiate and deliver results?

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Cybersecurity: turning risks into opportunity

Companies have needed to adopt digital tools faster than ever before to meet customers where they are—and that need will continue. In fact, 71% of Canadian CEOs are increasing digital investments over the next three years. As a result, cybersecurity has moved to the top of the list of extreme threats, followed by the pandemic and other health crises. Globally, it’s the other way around, with the pandemic topping the list of threats. This heightened concern is understandable, so as your organization increases its digital ambitions, it’s important to proactively invest in measures to strengthen privacy, systems and data.

Despite being a top threat to growth, with 87% of Canadian CEOs concerned about cyber threats, only 61% have explicitly factored cyber threats into their risk-management activities, and only 69% are planning on increasing their investments in this area. With every part of every organization now more reliant on their own technology and the technology of suppliers and other organizations within their ecosystem, CEOs need to appreciate the role they must play in securing their business. And securing a business involves more than making sure the CIO builds the right technical controls. 

It’s about assessing, understanding and managing the cyber and privacy risk impact of every business decision. Cybersecurity and privacy require strong governance and shared responsibility across your business, while remaining aware of the complexities of digitalization.

87% of CEOs are concerned about cyber threats in relation to their growth prospects  but only only 61% have explicitly factored cyber threats into their risk management activities with 69% are planning on increasing their investment .

✔ Invest in managing risks

If the past year has taught us anything, it’s that strong risk-management frameworks—including for cybersecurity—are essential. Review the threats facing your business, develop action plans and stress test them to help your organization thrive long after the crisis.

✔ Unite your lines of defence

As security, financial crime, safety, reliability, privacy and data ethics become increasingly intertwined, leading organizations are taking a proactive approach to build digital trust. They’re integrating traditionally siloed strategies to transform with speed and confidence.

✔ Use data with confidence

Canadians are increasing their online footprints, and growing privacy regulations are impacting how organizations use data. Organizations that integrate privacy and data ethics as core principles in their enterprise data strategy and governance can use data with confidence to create new opportunities.

Cybersecurity, privacy and financial crime

Use data with confidence

Innovate and transform securely to create new value for society in a digital, data-driven world.

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Simon Kennedy,
Deputy Minister of Innovation, Science, and Economic Development
Read Simon’s interview

"The pandemic has illuminated for many how Mother Nature can throw a disruptive curve ball at society and how important it is to deal with systemic risks."

Climate action can’t wait

Although Canadian CEOs’ concerns about the impact of climate change have increased year over year, they haven’t increased by much. Last year, 20% said climate change was an extreme concern. This year, the barometer ticked up to 23% (compared to 30% globally). What’s more, nearly one-third of Canadian CEOs (32%) reported being not or not very concerned about climate change at all.

Are Canadian CEOs considering the threat of climate change seriously enough? Two-thirds (68%) of Canadian CEOs haven’t factored climate change into their strategic risk-management activities (at a time when action is critical), and just under half (48%) plan to increase spending, compared to 6 out of 10 globally. CEOs of privately owned companies account for 70% of Canadian respondents, and they’re significantly less likely than their publicly traded counterparts to be increasing investment in environmental, social and governance (ESG) and sustainability initiatives over the next three years.

Now’s the time to do more. With investors increasingly considering the ESG impacts of their decisions, ESG is also an opportunity to expand their longer-term growth prospects. A robust environmental and sustainability plan will also set you apart and help attract the right talent to your organization, especially Gen Z and millennial workers, who emphasize the importance of sustainability and environmental programs where they work. Climate action can’t wait. Businesses need to develop impactful ESG goals and show stakeholders and clients the strategy is more than lip service.

%

of private companies

%

%

of public companies

%

are investing in ESG and sustainability issues


23% of Canadian CEOs ( 30% globally) are extremely concerned about climate change and environmental damage; 32% of Canadian CEOs (40% globally) factored climate change and environmental damage into their risk mitigation plans;  48% of Canadian CEOs (60% globally) plan on increasing long-term investments in sustainability and ESG initiatives

Climate change is something all Canadian CEOs (private or public) should be building into their investment and risk-mitigation strategies

✔ Put climate at the heart

Raise awareness of what needs to happen to make your business more sustainable. Embed it in the way you think about, plan and conduct business, including in your culture, values, relationships and employee engagement.

✔ Prioritize corporate resilience

One lesson from the pandemic is that regulators and investors may start to focus on an organization’s systemic risks. It may be wise to quantify the material risks related to climate change and integrate them into your core enterprise risk-management processes.

✔ Implement, monitor and measure

Deliver a sustainability program that includes effective governance, prioritized initiatives, incentives, milestones, key performance indicators, robust disclosure and measurable targets. Monitor and track progress.

People, well-being and productivity

While a third of Canadian CEOs say their headcount dropped in 2020, 6 out of 10 expect their headcount to increase this year to support the anticipated growth. Looking ahead, 8 out of 10 expect it to increase over the next three years. 

Canadian CEOs also say their top priority in terms of long-term investment is leadership and talent development, with 75% (67% globally) planning on spending at least modestly over the next three years. Their commitment to their people is paying off: the availability of key skills (which was among the top threats to growth for the past two years) has moved significantly down the list. 

The pandemic has focused CEOs’ minds on many things, but high on the list of priorities is the well-being of their staff. When we asked CEOs to say which aspect of their workforce strategy they’ll change to improve competitiveness, Canadian CEOs are more likely to focus on workplace culture (42% versus 32% globally) and well-being (34% versus 28% globally) than CEOs globally. Workplace culture and employee well-being impact productivity, and CEOs will need an engaged and adaptable workforce to sustain the organic growth they anticipate over the next few years. It’s time to focus on the new world of work and build their workforce of tomorrow to help provide a competitive edge with retention, productivity and more.

People as growth drivers

Canadians are investing in their people—and their efforts are showing:

75% of Canadian CEOs plan on increasing their investments in leadership and talent development, the #1 investment spot and more than global CEOs; 26% of Canadian CEOs (compared to 41% last year) are extremely concerned about the availability of key skills

Which parts of your workforce strategy are you changing to increase competitiveness?


Canada
Global
Workplace culture and behaviours
%
%
Employee health / wellbeing
%
%
Productivity through automation / technology
%
%
Workforce engagement/communication
%
%
Skills and adaptability of our people
%
%
Diversity and inclusion
%
%

✔ Create a workforce strategy

As people get used to new ways of working, it’s important to develop a comprehensive workforce strategy. Create a modern workplace that puts employee experience at the core to set your organization on the path to a healthier and more engaged workforce.

✔ Build a culture that supports lifelong learning

Upskilling is no longer a top threat, but 30% of Canadian CEOs still believe skills and adaptability will impact competitiveness. Use culture as the bedrock of your upskilling efforts and promote behaviours that support continuous learning to build an agile and resilient workforce.

✔ Invest in employee experience and measure the results

Make it easy for your employees to get work done by creating a frictionless workplace. Multiple systems, lack of tools and excessively complex processes take time and energy away from your employees. Create an experience that allows them to bring their best self to work and see the results in improved productivity, culture and well-being.

Workforce of the future

The world of work has changed. Has your workforce kept pace?

Build business resilience and maximize human potential in the new world of work.

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Industry spotlight

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Regional overview

Map Ontario

Ontario

67% of Ontario CEOs expect their headcount to increase over the next 12 months, which is more than the national average of 61% 60% plan to launch a new product this year (50% nationally) 43% are focusing on productivity through automation and technology to increase organizational competitiveness (34% nationally)

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Contact us

Nicolas Marcoux

Nicolas Marcoux

Chief Executive Officer, PwC Canada

Tel: +1 514 205 5302

Matthew Wetmore

Matthew Wetmore

National Managing Partner Industry & Regions, Strategy&, PwC Canada

Tel: +1 403 509 7483

Jennifer Johnson

Jennifer Johnson

National Cybersecurity, Privacy and Financial Crime Markets Leader, PwC Canada

Tel: +1 416 947 8966

Sajith Nair

Sajith Nair

Partner & National Leader - Cybersecurity, Privacy and Financial Crime, PwC Canada

Tel: +1 416 815 5185

Mike Harris

Mike Harris

Partner, Risk Assurance Services, PwC Canada Board Chair, ESG Practice and Net Zero Leader, PwC Canada

Tel: +1 604 806 7711

Jean McClellan

Jean McClellan

National Consulting People and Organization Leader, PwC Canada

Tel: +1 403 509 7578

Michelle Gronning

Michelle Gronning

National Consulting Leader, PwC Canada

Tel: +1 416 814 5780

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