Manitoba business leaders uneasy with increasing government regulation

CEOs challenged to keep up with provincial policy changes

View the survey results here

January 10, 2012

Manitoba’s business leaders are frustrated that the provincial government does not understand the realities of their industries and are fearful of growing government intervention in their operations. This is based on the results of 200 telephone interviews conducted with Manitoba business owners between October 24th and November 9th, 2011 by Probe Research on behalf of the Devon Group.

“Manitoba is not a club, business leaders have to work hard to get their points of view heard on Broadway” said Cameron MacKay, Vice President of the Devon Group.

When asked to assess whether or not increased provincial government involvement in their corporate affairs was harmful to their business, twice as many Manitoba CEOs agreed that increased intervention would negatively impact their operations than thought this intervention would be beneficial (41 per cent of respondents agreed with the statement that “more provincial involvement in my industry is bad for business,” versus 21 per cent who disagreed).

Moreover, 31 per cent of CEOs also expect government involvement in their sector to increase over the next three to five years (including 11 per cent who expect levels to increase a lot and 20 per cent who expect provincial involvement to increase a little). Issues that have been brought up by business leaders in the past include business registration, workers’ compensation, employment standards and other sector-specific rules.

“Waning public confidence in the conduct of corporations generally has led governments of all stripes to play a larger role in regulating the private sector,” said MacKay. “Government intervention can profoundly affect a company’s profitability and we heard clearly that CEOs are frustrated by their inability to effectively communicate the impact that government decisions have on their businesses.”

In the context of this anxiety over creeping government involvement in their enterprises, 33 per cent of CEOs concede they have great difficulty forging positive relationships with provincial policy-makers.  Of particular note, over half (55 per cent) of respondents count on interest groups such as chambers of commerce to represent their views before the provincial government; but only twenty five per cent of those are very satisfied with the work done on their behalf by these business associations. 

"Manitoba business leaders expect government will play a greater role in their business affairs. Even though business leaders may be frustrated by the regulatory environment in which they operate, government isn't going anywhere soon and companies must give policy-makers the kind of time and attention that they do to their customers and suppliers," said MacKay.

There are four lessons to be learned from this. First, maintaining open, positive relationships with policy makers is increasingly a critical success factor for business; even tough CEOs view their companies’ communications with government as both lacking and inefficient.

Second, it is critical, particularly for those firms operating in heavily regulated sectors, to monitor government and policies that could affect its constituent firms, while keeping policy makers apprised of sector changes (e.g. product or category innovations, new or closing markets, challenges with access to capital or human resources, etc.).

Third, government relations are largely ineffective when used solely for “crisis communications.”  The best way to achieve results with policy makers is to cultivate and maintain a positive presence before regulatory change is afoot.

Finally, to protect business practices from injurious government intervention, business leaders will need to elevate the management of government relations into the top leadership’s mandate, and enact strategies proven to build productive relationships with government officials and policy makers.

To view the survey results, click here.

For more information, please contact:

Cameron MacKay

416-504-5151 ext. 340

cmackay@devongroup.ca