CEOs Predict Canadian Dollar to Increase over Other Currencies, Coupled with Improved National Sales Revenues.

Business Editors

CALGARY, Alberta--(BUSINESS WIRE)--June 10, 2003

Q2 TEC Index Reveals Stagnant Employee Hires; Nation's Leaders Fear Lag of Canadian Productivity and Lack of Consumer Confidence, Not SARS

TEC International, the world's largest organization of CEOs, today released results of the Q2 Canadian TEC Index, a quarterly survey of chief executives. The TEC Index, which polls CEOs nationwide on current economic trends and issues affecting today's business climate, is the only survey of its kind. In the Q2 survey, approximately 75 CEOs nationwide were polled during the week of May 26, 2003. CEOs expressed their views on the country's current and future economic state, employment plans, capital expenditures, expected revenue and profit growth, and the relative value of the Canadian dollar.

This quarter TEC expanded the global scope of its survey by adding Malaysia to the list of TEC member countries participating in the survey, in addition to Australia, Canada and the UK. The result is a broader, worldwide perspective on the top economic and topical issues facing the world's CEOs. Also new this quarter, TEC worked with Dr. Richard Curtin, Director of Surveys of Consumers for the University of Michigan, as a consultant on the Index.

Overall, 81 percent of CEOs surveyed believe current economic conditions have either worsened or not improved much from a year ago; however, the majority expects their company's profitability (60 percent) and sales revenues (73 percent) to increase in the next 12 months. The survey also addresses the impact of SARS on their businesses, investment plans, deflation, most critical issues for the next Canadian federal election, fear of North Korea and potential for terrorist attacks.

According to the Q2 TEC Index, during the next 12 months, 91 percent of CEOs surveyed believe the value of the Canadian dollar will be higher or about the same (46 percent and 45 percent respectively) versus other currencies. However, the majority of Canadian CEOs see a mild negative impact (68 percent) when analyzing the rise of the Canadian dollar, versus the U.S. dollar and its impact on the economy.

Compared with last year's economic conditions in Canada, 43 percent of CEOs surveyed believe the conditions have remained the same. The majority of the remaining respondents, 38 percent, believe the economy has worsened over the last 12 months. Similarly, 54 percent of CEOs forecast economic conditions in Canada to remain the same over the next 12 months.

When asked about the sharp drop in U.S. inflation and its effect on Canada, 56 percent of CEOs stated that they are concerned. For actions that will have an impact on the Canadian economy, CEOs believe that more tax cuts (42 percent) and the Bank of Canada cutting interest rates (28 percent) will create positive influences. In addition, 40 percent of chief executives surveyed view the lag of Canadian productivity as the greatest threat to Canada's economy; the lack of consumer confidence was close behind at 31 percent. Observed as a direct consequence of Canada's economy, nearly 65 percent of CEOs surveyed expect their firm's total number of employees to remain the same during the next 12 months.

SARS is not foremost in the minds of Canadian CEOs, in a response rate very similar to the U.S., 68 percent of those surveyed believe SARS has had no impact on their business; however, 9 percent either reduced or stopped all travel to Asia Pacific.

With Canada's next federal election around the corner, political leadership and the economy, 31 and 27 percent respectively, top the list of most critical issues viewed by CEOs in that upcoming election. When switching their view to U.S. politics, 55 percent of CEOs believe that President Bush and his administration are doing a fair job leading post-war reconstruction in Iraq.

Reflecting the same plans for personal investment as U.S. CEOs, nearly 40 percent of Canadian CEOs expect to invest in stocks and 35 percent plan on real estate investments during the next 12 months.

2003 Q2 Canada TEC Index

   No. of respondents:          74
   Total # of surveys sent:     278
   Response Rate:               27%
   Survey Tool:                 Reciprix
   Analysis Completed:          6/4/2003
   Margin of Error:             W/ 95% CONFIDENCE = 11.4%
                                W/ 99% CONFIDENCE = 15%

NOTE: TOTALS MAY VARY DUE TO ROUNDING AND THE OPTION TO CHOOSE
MORE THAN ONE RESPONSE

1) Compared with a year ago, have overall economic conditions in
   Canada improved, remained the same, or worsened?
                                      Freq. Percent
   Improved                           14    19%
   About the same                     32    43%
   Worsened                           28    38%

2) During the next 12 months, do you expect the overall economic
   conditions in Canada to be better, about the same, or worse than
   now?
                                      Freq. Percent
   Better                             17    23%
   About the same                     40    54%
   Worse                              17    23%

3) Do you expect your firm's total number of employees to increase,
   remain about the same, or decrease during the next 12 months?
                                      Freq. Percent
   Increase                           20    27%
   About the same                     47    64%
   Decrease                            6     8%

4) Do you expect your firm's total fixed investment expenditures
   to increase, remain about the same, or decrease during the next 12
   months?
                                      Freq. Percent
   Increase                           30    41%
   About the same                     32    43%
   Decrease                           12    16%

5) Do you expect your firm's revenue growth to increase, remain
   about the same, or to decrease for the next 12 months?
                                      Freq. Percent
   Increase                           54    73%
   About the same                     13    18%
   Decrease                            7     9%

6) Do you expect your firm's profitability to improve, remain
   about the same, or worsen during the next 12 months?
                                      Freq. Percent
   Improve                            44    60%
   About the same                     15    21%
   Worsen                             14    19%

7) Do you expect the value of the Canadian dollar compared with
   other currencies to be higher, about the same, or lower during the
   next 12 months?
                                      Freq. Percent
   Higher                             34    46%
   About the same                     33    45%
   Lower                               7     9%

8) How is the rise in the Canadian dollar versus the U.S. dollar
   (15% so far this year) likely to impact the revenues or earnings of
   your company?
                                      Freq. Percent
   Strong positive impact              6     8%
   Mild positive impact               11    15%
   No impact                          16    22%
   Mild negative impact               32    43%
   Strong negative impact              9    12%

9) How is the rise in the Canadian dollar, versus the U.S. dollar,
   likely to impact on the economy in general?
                                      Freq. Percent
   Strong positive impact              1     1%
   Mild positive impact                8    11%
   No impact                           4     5%
   Mild negative impact               50    68%
   Strong negative impact             11    15%

10) Have you seen any reduction in cost inputs as a result of the
    rise of the Canadian dollar?
                                      Freq. Percent
    Yes                               34    47%
    No effect                         19    26%
    No                                20    27%

11) Where do you personally plan to invest during the next 12
    months?
                                      Freq. Percent
    Stocks                            29    39%
    Bonds                             12    16%
    Real estate                       26    35%
    Other                             12    16%
    No planned investment             21    28%

    Other: Please specify:            RESPONSES
    Business                          4
    Big chunks of iron                1
    Funds                             2
    Iron                              1
    Private                           1
    RRSP                              1
    Own company shares                1

12) President Bush and his administration are:
                                      Freq. Percent
    Doing a poor job leading post-war
      reconstruction in Iraq          22    30%
    Doing a fair job leading post-war
      reconstruction in Iraq          40    55%
    Doing a good job leading post-war
      reconstruction in Iraq          10    14%
    Doing an excellent job leading
      post-war reconstruction in Iraq  1     1%

13) Are you concerned about the sharp drop in U.S. inflation and
    its effect on Canada?
                                      Freq. Percent
    Yes                               41    56%
    Unsure                            18    25%
    No                                14    19%

14) What do you think will be the most critical issue in the next
    Canadian federal election?
                                      Freq. Percent
    Economy                           20    27%
    Tax cuts                           3     4%
    Unemployment                       0     0%
    Consumer confidence                0     0%
    Terrorism                          0     0%
    Education                          0     0%
    Healthcare                        11    15%
    Political leadership              23    31%
    Relations with major
      trading partners                17    23%
    Ecological concerns                0     0%
    Other                              1     1%

    Other: Please specify:            RESPONSES
    Budget                            1

15) What do you see as the greatest threat to the Canadian
    economic future?
                                      Freq. Percent
    Cost of reconstruction in Iraq     0     0%
    Another terrorist attack           3     4%
    Lack of consumer confidence       22    31%
    Unemployment                       0     0%
    SARS                               3     4%
    Downturn of the travel industry    5     7%
    Lag in Canadian productivity      29    40%
    Other                             10    14%

    Other: Please specify:            RESPONSES
    Automotive slowdown               1
    Increasing trade barriers         1
    Liberal Party                     1
    MAD Cow and SARS                  1
    Our Prime Minister                1
    Our rising                        1
    Political Leadership              1
    Stronger CDN dollar               1
    The Liberal Government            1
    U.S. economic problems            1
    US/Canada relationship            1

16) What action do you think would have the most positive impact
    on the Canadian economy?
                                      Freq. Percent
    If the Bank of Canada cuts
      interest rates                  20    28%
    More foreign investment            7    10%
    More tax cuts                     30    42%
    If the Federal government spends
      more money on healthcare and
      other related projects           5     7%
    Other                              9    13%

    Other: Please specify:            RESPONSES
    Change in government              3
    Clear economic strategy &
      leadership                      1
    Faster depreciation write offs    1
    Merger of the Alliance & PC
      Parties                         1
    Improving US/Canadian
      relationship                    1
    Increased exports                 1
    Lower dollar value                1
    N/A                               1
    Depreciation on capital equipment 1

    17) How has SARS impacted your business?
                                      Freq. Percent
    Stopped all travel to Pacific Rim
      countries                        4     5%
    Reduced business relations with
      Pacific Rim countries            3     4%
    Positive impact business           1     1%
    No impact on business             50    68%
    Negative impact on business       13    18%
    Other                              3     4%

    Other: Please specify:            RESPONSES
    Changed world demand on steel     1
    More shippers are creating
      procedures                      1
    Travel to Ontario in question     1

18) If the "Mad Cow" disease outbreak in Alberta is prolonged, how
    is this likely to impact other sectors of the economy?
                                      Freq. Percent
    Expect a strong negative impact   17    23%
    Expect a mild negative impact     50    68%
    Expect no impact                   4     5%
    Expect a mild positive impact      2     3%
    Expect a strong positive impact    1     1%

19) Do you believe Canadians are concerned, now that they may be
    eating suspect meat?
                                      Freq. Percent
    Yes                               16    22%
    No                                29    39%
    Too soon to tell                  29    39%

20) Are you more or less concerned about terrorism following the
    war in Iraq?
                                      Freq. Percent
    More concerned                    25    34%
    No change                         45    62%
    Less concerned                     3     4%

21) Which country do you currently view as presenting the most
    danger toward the world economy?
                                      Freq. Percent
    North Korea                       29    42%
    Iraq                               4     6%
    Saudi Arabia                       6     9%
    Afghanistan                        1     1%
    Syria                              3     4%
    Iran                               5     7%
    Other                             21    30%

    Other: Please specify:            RESPONSES
    China                              7
    Japan                              1
    U.S.                              14
    Middle East                        2
    Religious U.S. fractions           1

ABOUT THE CANADIAN TEC INDEX

Canadian businesses with annual sales between $1 million and $3.5 billion represent the most vital component of the nation's economy. The small to mid-size business sector creates 75 percent of all new jobs and generates 80 percent of revenue. The opinions of these business leaders provide a clear snapshot of current economic market, as well as industry trends and their plans for growth over the next 12 months. These insights provide a leading indicator for employment, capital expenditure, sales, and revenue trends. The TEC Index is a compilation of responses from nearly 100 CEOs of small to mid-size companies, and is the only comprehensive report of their opinions and projections. The TEC Index is conducted quarterly by TEC International.

ABOUT TEC CANADA

T.E.C. (The Executive Committee) Ltd. is an international organization for Chief Executives (CEOs), Managing Directors, Business Owners and/or Bottom Line Decision Makers offering confidential business advisory sessions and professional support.

Members are placed in groups with non-competing peers to gain insights and learn from each other's business experiences. Each group is led in a one-day session by a TEC Chair, a highly experienced business professional with specialized mentoring skills. The Chair also holds one-on-one sessions with each member of the group to address individual needs.

TEC was established in Canada in 1985 and currently has more than 460 members in 14 cities.

ABOUT TEC INTERNATIONAL

Founded in 1957, TEC International (www.teconline.com) is the global leader in CEO development. With a membership consisting of more than 8,000 members in 14 countries worldwide, TEC is a comprehensive representation of small and mid-sized business -- a population that comprises more than 80 percent of the nation's annual revenue.