The CEO Poll: Spend, but carefully
Joe Castaldo
Canadian Business Online
February 16, 2009
Canadian business leaders want a recession-fighting budget.
The Conservatives are set to deliver the federal budget on Jan. 27, and a panel of Canadian CEOs believes the government should boost spending to help the country through the recession, according to a web poll conducted by COMPAS Inc. But some are wary of too much spending.
The 140 CEOs who responded to the survey are slightly more inclined to believe that central banks are more effective than governments when it comes to aiding the economy through liquidity injections, and that they also treat regions and sectors fairly without politics entering the question.
But governments are still crucial, according to the respondents. "The government needs to take a strong leadership role in making the economy the absolute priority right now," wrote one respondent. "The opposition parties should realize that this issue is larger than their petty bickering and should support the recovery plan."
A slim majority of the panelists (52%) believe the best way to prevent the economy from tanking further is for the government to spend heavily. Infrastructure investment is expected to play a large role in the upcoming federal budget, and the business leaders provided guidance on how to do it correctly. Most of the CEOs say government should first fix what's broken before committing money to new projects. This ensures work can begin immediately and the economic benefits will be felt sooner. The respondents also believe workforce training should be an integral part of any spending plans, and that infrastructure spending should be phased in over a long period of time. Finally, constant evaluation is necessary to ensure projects meet the previously stated goals.
But not every respondent was thrilled at the prospect of more spending. "It is not wise or possible to try to drink yourself sober. The developed world needs to develop an instinct to save, not feed a desire to spend," wrote one CEO. Government spending can actually make matters worse, according to 40% of the respondents. It can lead to lower spending down the road, increased taxes and debt default. "Any debt incurred to spur the economy should be as a result of corporate and personal tax cuts," one respondent wrote. "Corporate bailouts in any form are simply bad business."
To view complete results and additional polls, please click here.
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