Canada is losing its competitive edge in exports beyond commodities as fewer small companies look outside their home market, Toronto-Dominion Bank Chief Executive Officer Ed Clark said.
“Our market share of U.S. non-commodity imports has dropped by about 30 percent over the past 10 years,” Clark said today at the bank’s annual investors’ meeting in Calgary. “Our business sector is not as engaged in exports as it is in many countries.”
Clark, 66, who will retire in November after a dozen years as CEO, said less than 10 percent of Canada’s small- and medium-sized companies are involved in exporting goods or services. About 50 companies represent half of the country’s exports, he said.
“We have to focus on ways to help out firms, especially smaller ones, compete outside of Canada,” Clark said, according to a text of prepared remarks.
Along with boosting exports, Canada must also remain focused on its energy industry, Clark said. The country’s oil producers have been paid lower prices for their heavy crude due to transportation bottlenecks, as pipeline proposals to the U.S. Gulf Coast and Canada’s Pacific Coast have been delayed amid opposition from environmental groups trying to block fossil fuel development.
“We have a best-in-class oil-and-gas sector that knows how to compete around the world,” he said. The country must commit to an energy-transportation strategy “that will ensure we are not vulnerable to one nation holding our resources hostage.”
Clark led a U.S. consumer-lending expansion that began in 2004 when the firm agreed to buy a 51 percent stake in Portland, Maine-based Banknorth Group Inc. Toronto-Dominion now has more branches in the U.S. than in Canada.
Toronto-Dominion’s first-quarter profit rose 14 percent to a record C$2.04 billion ($2.2 billion). The bank raised its dividend 9.3 percent. Gains were led by a 44 percent increase in its wholesale banking business, fueled by higher trading revenue. Retail banking earnings in Canada and the U.S. were also higher, as contributions from acquisitions added to results.
“The big news is that the U.S. is back,” he said today. The U.S. “is now viewed as the potential growth engine of the world,” he said.
The bank faces many hurdles including increasing competition, growing political and regulatory demands and new threats like cyberterrorism, Clark said.
Toronto-Dominion expects to meet a medium-term goal of 7 percent to 10 percent growth in earnings per share this year even as it continues to operate in a “tough, low-interest-rate, slow-growth environment,” he said.
To contact the reporter on this story: Doug Alexander in Toronto at email@example.com