CEO Panel on Canada-US Relations in Perspective: 91% Today Worse than Average in 100 Years, 36% Among the Worst or the Worst, 85% Missile Decision Serious Barrier to Good Relations, More Harmful than All Other Anti-U.S. Actions, 59% Condoleeza Rice s Trip Cancellation Appropriate Signal, 52% WSJ Criticism of Freeloading Canada Had Merit, Volunteered Disappointment with Martin Decision-Making Style, Concern about Economic Fallout, Comparison with Diefenbaker BDO Dunwoody/Chamber Weekly CEO/Business Leader Poll by COMPAS in the Financial Post for Publication March 7, 2005 COMPAS Inc. Public Opinion and Customer Research March 7, 2005
1.0 Introduction The Martin government s decision against participation in U.S. missile defence is widely perceived as very harmful in decision-making style and substance, and likely to carry an economic cost in terms of trade barriers. The missile decision is seen as more harmful to bilateral relations than any other recent decision or action. A large minority of respondents in the weekly business leader and CEO panel perceive Canada-American relations as among the worst in history. Paul Martin s ability to elicit goodwill is ranked with John Diefenbaker Chretien did worse while Pearson did better. Majorities see merit in both the Wall Street Journal s editorial attack on the Canadian government and in Condoleeza Rice s diplomatic signally in her trip cancellation. These are some of the key findings from this week s web poll of business leaders and CEOs, sponsored by BDO Dunwoody LLP and the Canadian Chamber of Commerce. 2.0 37% Say Martin Government s Relations with Washington the Worst or Among the Worst in History Majority Approves WSJ Criticism of Ottawa and Rice s Trip Cancellation Signal Members of the COMPAS/Financial Post panel have a strong record of esteem for Prime Minister Martin dating to his long period as Finance Minister. But most are disappointed and some dismayed by his handling of the missile issue and Canada-U.S. relations in general. The Wall Street Journal published a scathing editorial and U.S. Secretary of State Condoleeza Rice signaled U.S. disapproval by canceling her trip in the wake of the Prime Minister s announcement of Canada s non-participation in missile defence. The CEOs and business leaders on the panel view both the 2
WSJ editorial and Dr. Rice s cancellation as well founded, as evidenced in tables 2A and 2B. A majority of panelists see merit in the Wall Street Journal editorial with 53% scoring in the agreement range of 5-7 on the 7 point scale vs. 33% scoring disagreement in the 1-3 range. The magnitude of panelists agreement with the influential newspaper is striking given the strong language used. Canada was decried for freeloading. An even larger majority considers Dr. Rice s diplomatic signaling appropriate. Panelists deemed it appropriate by a 2:1 margin. Thus, 59% indicated by their scores (5-7) that they considered her action appropriate while 29% (scores of 1-3) deemed it inappropriate. As evidenced in table 2C, a strong consensus holds that Canada-U.S. relations are in a poor state by historical standards. The most striking finding is that 37% believe that the Martin government s relations with Washington are among the worst in history. Table 2A: (Q1) As you may know the Wall Street Journal said that the Martin government s rejection of any involvement in missile defence was an objectionable form of free loading. On a 7 point scale where 7 means a lot of merit and 1, the opposite, how much merit is there in the WSJ viewpoint? MEAN 7 6 5 4 3 2 1 dnk 4.7 29 16 17 4 8 11 14 1 Table 2B: (Q2) Newly appointed Secretary of State Condoleeza Rice has just cancelled her visit to Canada as a form of diplomatic signaling that the U.S. government was surprised and disappointed by the Martin government decision in light of NORAD s long history of shared continental defence. On a 7 point scale where 7 means an entirely appropriate diplomatic signal and 1, the opposite, what score would you give Dr. Rice? MEAN 7 6 5 4 3 2 1 dnk 4.7 28 19 12 10 8 6 15 1 3
Table 2C: (Q3) Thinking back over more than a century of Canada-U.S. relations, would you say that Can-Am relations this season were [ROTATE POLES] % The very worst we ve had 6 Among the worst 31 Worse than average 54 Better than average 6 Among the best 1 The very best 0 Don t know/refused 2 Respondents tended to place the missile decision in either a trade or military context. The following opinions from two CEOs illustrate these perspectives: Two-thirds of our local GDP is due to Foreign Trade and 80% of that is due to the USA, but only about 6-7% of their GDP is due to trade with us. Do your math. We need them far more than they need us. Maintaining good relations with them is critically important to Canadian jobs and prosperity, plus we have made ourselves completely reliant on them for our own self defense. We snub our noses at them [the United States] at our peril. This does not mean that we have to be subservient - but we need to treat them as friends, not enemies! I am embarrassed we can not expect the U.S. to defend us if we are not willing to participate in the missile defense shield program! Some CEOs and business leaders highlighted the style of the Canadian government s decision-making as the root problem: It is how it [the decision] was made that bothers me. The government continues to say one thing today, and take an entirely opposite perspective or action the next day. No wonder the Americans are confused...so are we. We cannot 4
continue to grow economically without positive relationships with our largest trading partner. The manner in which our Prime Minister handled the missile defense issue was embarrassing. The CEO of one of Canada s largest companies concurred, highlighting the economic cost of the federal government s decisional style. The current Prime Minister's position is another example of his dithering and inability to make up his mind, he volunteered. [It] is going to have significant costs for our business community. Another CEO pointed to the lost opportunity to learn more about technology. While the reality of the danger from missile assaults is possibly difficult to discern, he pointed out, we will certainly not find ourselves enlightened if we stay out of detailed discussions on the subject. Several CEOs volunteered that the missile decision reflected poorly on the Prime Minister himself: The Martin decision to not participate in North American missile defence is a despicable example of Canada shedding its responsibility. By doing so we risk becoming a U.S. puppet in world affairs. If our Prime Minister were going to open up a chain of breakfast restaurants he would name them The Waffle House. Mr. Martin, please make a decision and stick with it, your friends are beginning to wonder about you!!! Paul Martin has hit an all-time low as Prime Minister Paul, go back to finance! While all the volunteered references to Martin s decision-making style and to Ottawa s management of relations with Washington were negative, some respondents concurred with the federal government s opposition to missile defence on substantive grounds. As one business leader put it, Ballistic missile defence seems like a highly misguided notion and a completely ineffective policy initiative. It will never work, and there are far more useful ways to apply the same resources that will make a meaningful contribution to the security of North America. 5
3.0 Among Recent PMs Mulroney Elicited the Most Goodwill, Chretien the Least; Martin Scores with Diefenbaker Among the most recent six Prime Ministers who ruled for extended periods of time, Brian Mulroney and Jean Chretien occupy the extremes for their effects on Canada-U.S. relations, as shown in table 3. In practice, Brian Mulroney is selected by 73% of panelists as the Prime Minister who elicited the most goodwill while he is selected by 1% as the PM who elicited the least goodwill for a net gap score of +72. At the other end, Chretien earned a gap score of -53. Martin s gap score of -6 puts him in the company of John Diefenbaker (-9). U.S. President John F. Kennedy was well known for his displeasure with his Canadian counterpart. Under Diefenbaker, Canada was the only member of NATO not to officially mobilize its armed forces during the Cuban Missile Crisis. Table 3: (Q4-Q5) Under which of the following Prime Ministers did Canada have the most goodwill from the U.S.? Under which did we have the frostiest relations with the U.S.? [RANDOMIZE] MOST FROSTIEST GOODWILL RELATIONS GAP Brian Mulroney 73 1 +72 Lester Pearson 10 0 +10 Paul Martin 0 6-6 John Diefenbaker 0 9-9 Pierre Trudeau 10 21-11 Jean Chretien 1 54-53 Don t know/refused 8 9-1 6
4.0. Missile Defence Decision More Harmful to Canada-U.S. Relations than Every Other Action or Policy To place in perspective the impact of Paul Martin s anti-missile decision, respondents were asked to score the impact on bilateral relations of this decision along with seven other actions or behaviours. The overwhelming majority (85%) deem the missile decision to be a serious barrier to good relations as compared to 9% not holding this view, as shown in table 4. Among respondents with strong opinions, those who see the missile decision as having an extremely serious impact (score of 7) outnumber 36:1 those who see the decision as not have an impact at all (score of 1). Table 4: (Q6) Please score each of the following on a 7 point scale where 7 means a serious barrier to good relations and 1, the opposite. [RANDOMIZE] MEAN 7 6 5 4 3 2 1 dnk Martin government s recent decision against missile defence collaboration 5.8 36 32 17 6 5 3 1 1 Liberal MPs anti-american insults 5.4 27 24 22 11 7 4 1 4 Perceived low support for the U.S. policy in the Mid-East 5.4 22 31 26 12 6 1 2 2 Low investments in the Canadian military 4.8 16 17 24 20 12 4 4 2 Perceived low support for the U.S. at the U.N. 4.4 11 14 22 22 17 5 6 4 The possibility of decriminalizing marijuana 4.4 9 16 28 19 10 9 7 2 Perceptions of Canadian government stumpage fee subsidies in the 4.1 2 9 27 28 19 8 3 4 softwood lumber industry Perceptions of inadequate government inspection of Canadian cattle and feed (re. BSE) 4.0 4 12 22 19 24 11 4 4 7
Other actions or policies that did the most harm to Canada-U.S. relations were Liberal MPs anti-american insults, and Perceived low support for the United States in the Middle East. The fewest number of panelists saw perceptions of inadequate government inspection of Canadian cattle and feed (re. BSE) as a serious barrier to good relations. 5.0. Very Strong Views about Access to U.S. Markets as a Priority Concern For several years, members of the panel have believed that Canada-U.S. relations ought to be considered a priority concern for government, as shown in table 5. CEO and business leader opinion is even more firm on the issue today 93% deemed it an priority with 60% assigning the highest possible priority score, up from 52% a year ago. Table 5: (Q7) How much of a priority concern should Canadian access to U.S. markets be for government? Please use a 7-point scale where 7 means the issue is very serious and deserves high priority concern by government and 1, the opposite. Mean 7 6 5 4 3 2 1 DNK March 2005 6.3 60 23 10 3 1 2 1 1 April 2004 6.2 52 28 11 5 1 1 0 2 April 2002 6.2 53 22 11 6 2 1 1 5 4.0 Methodology The National Post/COMPAS web-survey of CEOs and leaders of small, medium, and large corporations and among executives of the local and national 8
Chambers of Commerce was conducted March 2-4, 2005. Respondents constitute an essentially hand-picked panel with a higher numerical representation of small and medium-sized firms. Because of the small population of CEOs and business leaders from which the sample was drawn, the study can be considered more accurate than comparably sized general public studies. In studies of the general public, surveys of 146 are deemed accurate to within approximately 8.1 percentage points 19 times out of 20. The principal and co-investigator on this study are Conrad Winn, Ph.D and Tamara Gottlieb. 9