1 July 2024
- Canadian multinationals concerned about business operating costs and the cost of labour (90%)
- Majority do not support the capping of passenger numbers at Dublin airport
- 80% planning to increase wages and 50% intending to hire more staff.
Rising costs are the number one risk factor for Canadian multinational companies in Ireland, according to the Ireland Canada Business Association’s latest member sentiment survey. Canadian companies employ over 15,000 people in Ireland directly and a further 12,000 indirectly, and include Irish Life, Air Canada, TD Bank, Irving Oil and Brookfield Asset Management.
When asked about the most significant risk factors for their business, the majority of respondents identified business operating costs and the cost of labour (90%), followed by staff recruitment (37%), cost of raw materials (10% ) and the contraction of the domestic market (10%).
Specific factors driving up costs for ICBA member companies include labour (63%), energy (37%), staff retention (32%), regulatory compliance (26%), rent (26%) and insurance (21%).
Despite concern about rising costs, most Canadian multinationals are continuing to invest in their workforce this year, with almost 80% planning to increase wages and 50% intending to hire more staff. The majority of respondents are also investing in upskilling and wellbeing of their workforce.
In addition to rising costs, companies are also concerned about the introduction of new rules and regulations. A mere 52% are ready for the introduction of Pension Auto-enrolment, which is expected to be introduced in January 2025, with one-third calling for a delayed start. And just 25% are ready for the introduction of CSRD legislation, which strengthens the rules around sustainability reporting for large companies and listed SMEs. The remaining 75% of companies are either ‘not prepared’ or ‘working on it’.
Connectivity and in-person communication are important factors for ICBA member companies, with 90% reporting increased or similar levels of business travel in 2024. Almost three-quarters of respondents do not support the capping of passenger numbers at Dublin airport, a move that threatens to negatively impact valuable tourism from Canada and ease of business travel.
The number of Canadian companies setting up operations in Ireland has grown exponentially in recent years, with the ICBA seeing strong growth in membership as a result (currently standing at 100 members). The most common reasons that Canadian multinationals decide to set up in Ireland are:
- Access to European market (35%)
- English speaking (35%)
- Competitive tax regime (30%)
- Ireland’s legal system (30%)
- Availability of talent (25%)
- Cultural fit (25%)
Commenting on the ICBA member sentiment survey, Dr Deirdre Giblin, Chair of the Ireland Canada Business Association said:
“It is clear from our 2024 survey results that ICBA members are committed to employing more staff in Ireland, increasing wages, and investing in the wellbeing and education of their workers. However, the cost of doing so is becoming increasingly prohibitive, particularly as businesses are, at the same time, trying to prepare for the introduction of new rules and regulations such as CSRD and pension auto-enrolment.
As a small, open economy, Ireland relies heavily on external trade and foreign direct investment. Therefore it is critical that Ireland’s business environment remains one in which multinationals can thrive, and addressing spiralling costs is central to that goal.
Moreover, as outlined in the ICBA’s recent economic report compiled by Economist Jim Power, Ireland can have an over reliance on US multinationals. While US foreign direct investment is very valuable and must continue, Ireland still needs to diversify. By continuing to build the economic and business relationship between Ireland and Canada, we can reduce this concentration risk and grow our trading relationship with one of the world’s largest economies.”
Dr Deirdre Giblin, Chair of the ICBA, is available for further comment.
For interviews & further Info: Patrick Haughey, ICBA Media Relations 087 2394054
About the ICBA:
The ICBA is the voice of the Ireland Canada Business community. Our membership is composed of chief executives and senior management of Canada’s leading enterprises who have located their European operations in Ireland. Since 1978 we have been connecting executives and organizations in Canada and Ireland for the purpose of bilateral investment, trade, and entrepreneurship. As a membership organization, our members make our mission possible. They span over 20 business sectors and directly and indirectly support more than 25,000 jobs across the country and hundreds of small businesses. Our partnerships with the Canadian Embassy and the Ireland Canada Chambers inform our work.