Why don’t Canadians trust businesses?

Canadians are a skittish bunch, according to Edelman's annual Trust Barometer. And the economy isn't helping.
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Canadians’ trust in businesses has plummeted and has fallen below the global average, according to results from Edelman’s 2015 Trust Barometer Survey.

Edelman surveyed 1,000 Canadians representing the general population from October to November, including 200 it deemed members of the “informed public” (college educated, in the top 25% income bracket for their age group and report significant media consumption and engagement with the news). This was also done in 26 other global markets.

Of the four sectors the survey looked at – business, government, NGOs and media – business saw the greatest drop in trust among the informed public, with 47% of respondents saying they trusted businesses this year from 62% in 2014. This is below the global average of 57%, which only dropped two points compared to last year.

Some industries were hit harder than others. Consumer health dropped 12 points to 56%, automotive 13 points to 50%, energy 10 points to 49% and chemicals 10 points to 37%.

John Clinton, chair and CEO of Edelman Canada and North American head of creative and content, points to a few key events he suggests may have contributed to these drops. The Health category saw a combination of a rise in natural health products and more people questioning the efficacy of the medicine they buy. There were an “unprecedented” number of recalls across several different automotive brands. Falling gas prices contributed to a negative perception of the energy industry in Alberta while hot topics such as the Northern Gateway Pipeline and the negative impact of extraction methods continued to be prolific issues. The chemical industry, traditionally the least-trusted industry, saw an increased drop due to negative publicity around how pesticides were affecting the population of wildlife such as bees.

However, most of these factors were present in the U.S. as well, and 60% of people there reported they trusted business, which is actually a 2% increase from last year. Clinton attributes this to differences in the economy, which began a downturn here and a surge in the U.S. in the fall.

“There’s an overall skittishness about what’s going on,” Clinton says. “We know that one of the key drivers of trust is economic prosperity, and this report is a signal that people aren’t sure about how things are going or how they’re going to go in the future.”

Also, the trust in CEOs fell to 28% from 33%, far below the global average of 41%. Clinton says Canadian CEOs should see this as a place where there is room to turn the perceptions of their companies around. If leaders are more active in the public eye, they can communicate what their companies are doing to contribute to a greater good, something that is especially important during times of economic uncertainty. When asked what increased their trust, 55% of Canadians said contributing to the greater good, with 53% saying failing to do so contributed to distrust.

“What we’re seeing really loudly is that the benefit people look for is not just personal, it’s societal,” Clinton says. “There’s a huge portion of the population worrying about what job and what future they can have, and that’s very much a collective issue.”

Clinton also notes while the tech industry was the most trusted in Canada at 73%, 53% of Canadians believe innovation is moving too fast. While 15% of respondents said they thought companies’ motivation for innovation were to improve people’s lives and 14% said it was to contribute to the greater good, 80% identified it as meeting business goals and 75% as greed or money. Clinton says companies need to be transparent about the innovations they are developing, the benefit they are delivering and make sure those claims are being evaluated by outside sources.

Interestingly, Canadians’ lack of trust in business isn’t translating to other countries: globally, 75% of respondents said they trusted companies based in Canada the most, tied for second overall with Germany and only one point behind Sweden.

Canadians were overall less trusting this year, falling below the global average after indexing above it last year. While trust in NGOs in Canada stayed the same at 67% and government dropped only 2% from 51% to 49%, trust in media saw a significant drop, from 58% to 47%. In addition to the continued negative attention from the industry’s hardships, Clinton attributes this to the timing of the survey, which occurred as allegations began to arise around CBC host Jian Ghomeshi.

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