Press release

9 Jun. 2021 Toronto, CA

Survey finds Canadian companies outperformed on digital transformation, underperformed on workforce management through pandemic

Nearly one-third confirm they’re looking at M&A to help them reimagine business models

Press contact
Victoria McQueen

EY Canada Team Lead, Public Relations

Leading the development and distribution of external communications and social media across Canada. Can be found by the lake in the summer and on the slopes in the winter.

Nearly one-third confirm they’re looking at M&A to help them reimagine business models

  • Three-quarters of Canadian companies say their digital transformations outperformed
  • One-third acknowledge they underperformed when it came to workforce management
  • Almost 8 out of 10 companies admit to a failed or cancelled acquisition in the last year

New research from EY finds more than three-quarters (78%) of Canadian companies believe they outperformed during the pandemic with respect to their digital transformation efforts. The EY Global Capital Confidence Barometer finds this area remains a top priority, with 68% of Canadian companies planning to increase strategic focus and investment in advancing digital agendas.

“Investments in digital may have been a reactive trigger to the pandemic, but moving forward, executives are looking to drive opportunistic investments to create more flexible operating models and greater cost efficiencies," says Doug Jenkinson, Partner, Strategy and Transactions at EY Canada. “Optimism of a rapid return to pre-pandemic revenues, coupled with low interest rates, are motivating executives to capitalize on new opportunities for growth — predominantly through mergers and acquisitions. For many companies, this includes divesting non-core assets and redeploying capital in a buy vs. build approach to accelerate growth and compete on a global scale.”

The EY survey finds 53% of Canadian companies plan to actively pursue M&A in the next 12 months. For 40% of Canadian executives, that includes looking at bolt-on acquisitions to increase market share. Another 27% say they have their eyes on transformative deals that could help them reimagine business models or penetrate new geographies.

Do you expect your company to actively pursue M&A in the next 12 months?

While the M&A market may be experiencing a renewed bull run, the survey suggests companies are being prudent in decision-making, with 79% of Canadian executives indicating their company failed to complete or has cancelled a planned acquisition in the last 12 months.

"A wait-and-see attitude may have proven prudent in the short term, but could hamper growth in the longer term if companies choose to sit on the sideline,” suggests Jenkinson. “Target assets with the right competencies and synergistic qualities are hard to find. Companies that actively pursue M&A to accelerate growth will increase their chances of outperforming their competitors as we look towards economic recovery.”

Canadian companies surveyed believe they outperformed in many areas during the pandemic, but 32% of executives acknowledge they underperformed when it came to workforce management. Going forward, 78% confirmed the pandemic has increased their strategic focus and investment in their people.

"As Canadian executives examine lessons learned from the pandemic and prepare their path forward, they must put humans at the centre of their focus, apply technology with speed and innovate at scale in order to succeed,” explains Jenkinson. “Canadian companies that do, can do more than prosper — they can make bold moves and create exponential value that lasts.”

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This news release has been issued by Ernst & Young LLP.

This news release has been issued by Ernst & Young LLP.