This information is from the 2022 KPMG CEO Outlook survey. More current results are available in the most recent KPMG CEO Outlook survey.

On the horizon

There is much uncertainty about the economy these days – from inflation concerns to rising interest rates to skills gaps to regulatory changes.

The findings from our latest surveys of Canadian business leaders reflect these concerns with most expecting the country to fall into recession in the next 12 months. However, the majority expect it will be mild and short and have already taken steps to ride out the upcoming turbulence.

In fact, beyond the near-term challenges, business leaders are quite bullish on the fundamentals for the Canadian economy over the next three years. Nearly all (96%) Canadian CEOs surveyed in KPMG International’s annual CEO Outlook Report expressed confidence in the growth prospects for their company, industry and the Canadian economy.

In similar, new research with the leaders of 503 small-and-medium-sized businesses (SMB), more than eight in 10 (83%) said they believe their businesses will grow over the next three years.

Confidence in growth prospects over the next three years

This level of confidence is born out in their projections for earnings and employee growth. More than a third of Canadian CEOs (37%) polled in our global survey expect annual earnings to climb by 2.5% or higher per annum over the next three years. SMB leaders are even more optimistic, with almost three in five (59%) expecting revenue to jump 2.5-10% a year.

To help deliver on this growth, organizations of all sizes plan to increase hiring once they get through the short-term period of turbulence. Nine-in-ten CEOs at large Canadian corporations (89%) expect to increase their employee base in the next three years with nearly four in 10 (38%) calling for growth of six% or more.

Eight-in-ten SMB leaders (77%) also plan to grow with three-quarters (75%) expecting growth to exceed 6% – and 22% anticipating an increase of at least 11%.

All of this bodes well for medium-term strength of the economy and echoes confidence in their ability to grow earnings.


67% of Canadian CEOs are expecting high M&A activity, an increase of 11% over last year and 20% higher than global

This optimism reflects the actions organizations have already taken to prepare for an anticipated recession. Nearly three-quarters of Canadian CEOs (71%) have already adjusted their strategies to focus on boosting productivity. Half (51%) have already been managing costs by increasing prices and nearly the same number (48%) are reducing profit margins.

Over 80% of SMBs have identified, or are identifying and eliminating, inefficiencies and unnecessary complexity in their operating models. This fundamental step – while essential for recession proofing – is best practice at any time, helping to expose gaps or vulnerabilities and honing the organization’s competitive edge.

The realities of the past two-and-a-half years have seen organizations increase automation, which has improved efficiencies and freed up the ability of employees to deliver more impactful work.

To prepare for a potential recession – and considering COVID-related supply chain disruptions as well as geopolitical risks - two in five CEOs and SMBs have already diversified their supply chain, to create better price and delivery certainty.

In our global survey, Canadian CEOs expressed the biggest appetite (67%) for high impact M&A transactions to drive growth. This was up 11% over last year and a full 20% higher than their global counterparts.

While most Canadian CEOs have put in place good fundamentals to navigate recession headwinds and drive growth, challenges remain requiring leaders to be vigilant in assessing risks and opportunities.

Nearly a quarter of CEOs state that inflation-proofing capital (24%) and input costs and advancing digitization and connectivity across the business (23%) are their top operational priorities to achieve growth.

A scarcity of skilled talent

Talent risk once again made the list as a threat to growth for the CEOs of the largest Canadian organizations after falling off the list last year and ranking in their top three concerns two years ago.

While all segments of Canadian business indicated plans to increase headcount, finding those employees with the needed skills to drive growth may be a challenge, especially for SMBs. Sixty percent of CEOs and 56% of SMBs say they lack the people skills to manage the strategic and operational rollout to transform their business.

As many as two-thirds of SMBs say that they are already having a difficult time hiring people with the skill sets they need to grow their business and 57% are finding it difficult to recruit “talent of the future”, such as engineers, developers, and data scientists.

Over half (53%) are considering recruiting outside of Canada and as many as 74% say Canada must welcome more foreign tech talent to meet business labour force needs and become an innovation leader.

Increased and targeted immigration will help, though even more aggressive levels of newcomers, new talent models, and labour productivity and efficiency may well be needed to counter the emerging ‘silver tsunami’ of retiring boomers.

The dearth of specialized talent ripples through the economy and is also being felt on the climate change front. When asked what the greatest barrier is for SMBs in Canada to achieve net-zero or similar climate ambitions, the No. 1 hurdle: The lack of skills and expertise to implement solutions.

Government, academia and business need to work together to identify the existing and emerging skills needed so that we start to produce the graduates and attract the skilled immigrants needed to drive our economy forward.


63% of SMBs are having a hard time hiring people with the skill sets needed to grow their business

Canadian business leaders have learned much about their organizations, their people, and their customers over the past two years.

They understand the importance of managing for today without losing sight of the bigger picture. A short-term recession is one of many challenges to overcome but Canadian leaders are already taking steps to minimize the impact and come out the other side stronger.

Key actions

  1. Identify and eliminate inefficiencies and unnecessary complexity in the operating model
  2. Stay the course on digital transformation to gain that much-needed competitive edge
  3. Work with government, academia, and industry associations to identify and address labour gaps, including attracting skilled immigrants
  4. Consider partnerships or M&A to acquire key skillsets and digital capabilities

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