1. Alberta Business Beat Volume 1, March 2013

2. Background and Methodology

3. Business & Agriculture Background & Objectives Background ATB Financial commissioned NRG Research Group to conduct a survey of 300 randomly selected small- to medium-sized businesses in Alberta each quarter, beginning in Q4- FY2013. The purpose of the study is to gain an understanding the challenges faced by small- to medium-sized businesses in Alberta, and to track confidence in the business climate in Alberta. Research Objectives »Measure business owners and managers perceptions of the current business climate compared with six months ago, as well as their assessments of what the business climate will be like six months from now; »Understand internal and external factors that may impact small- to medium-sized businesses in Alberta, such as reliance on the price of natural resources or the challenges of various areas of business management; »Gauge the likelihood of investment plans in a number of different areas, such as investment in technology or expansion into new foreign or domestic markets; »Understand potential challenges for small- to medium-sized businesses in growing their businesses; and, »Profile the firmographics as well as respondent demographics for small- to medium- sized businesses in Alberta.

4. Business & Agriculture Methodology Randomly selected Alberta SMEs Randomly selected Alberta SMEs Qualifying Businesses < 500 employees <$20 million annual revenues Must be financial decision makers or influencers Excluded agriculture, government, financial institutions, media, market research, PR, advertising and communications sectors Excluded agriculture, government, financial institutions, media, market research, PR, advertising and communications sectors Field dates: January 22-31, 2013 Telephone + online option Over 3,000 businesses contacts made and 303 completed the survey Over 3,000 businesses contacts made and 303 completed the survey Margin of error is +/- 5.8% Margin of error is +/- 5.8%

5. Key Insights

6. Business & Agriculture Key Insights Optimism remains high despite talk of the bitumen bubble. Albertas population is growing quickly and there is still a skilled labour gap. There a need for succession planning in Alberta.

7. Detailed Findings

8. Alberta Business Landscape

9. Business & Agriculture Make-up of Alberta Businesses 98.1% employ less than 50 people (Small) Source: Statistics Canada, Business Register (based on business locations), December 2011. 81.6% employ less than 5 people (Micro) 1.8% employ 50 to less than 500 employees (Mid-sized) Small & Medium Sized Enterprises (SMEs)

10. Business Confidence

11. Business & Agriculture Optimistic about the future Alberta Economy 76% will be better off or the same Your Company 87% will be better off or the same 86% of Alberta SMEs agree their business success is tied to the Alberta economy HOW DO YOU THINK …………… WILL BE SIX MONTHS FROM NOW? Source: ATB Financial, Survey on Alberta SMEs, January 2013, 303 respondents.

12. Business & Agriculture The price of oil and gas has a direct impact on a SMEs business success the price of a barrel of oil the price of a natural gas % AGREE THE SUCCESS OF THEIR BUSINESS IS TIED TO …… Source: ATB Financial, Survey on Alberta SMEs, January 2013, 303 respondents.

13. Business & Agriculture Energy patch optimism $48.24 billion in capital in 2013 Last energy boom in 2006-08 Since survey, weaker energy prices Source: Statistics Canada, CANSIM table 029-0005.

14. Business Growth

15. Business & Agriculture Intentional growth is paying off 7 in 10 of SMEs are intentionally trying to grow their business. OVER THE NEXT 24 MONTHS, DO YOU HAVE ANY PLANS TO…? % YES 48% are seeing growth in their business as a result of their efforts. 16% are experiencing organic growth. Source: ATB Financial, Survey on Alberta SMEs, January 2013, 303 respondents.

16. Business Challenges

17. Business & Agriculture Challenges for small & mid-size business Source: ATB Financial, Annual Business Banking Survey, March 2012.

18. Business & Agriculture Where do SMEs spend their time? Source: ATB Financial, Survey on Alberta SMEs, January 2013, 303 respondents.

19. Business & Agriculture What is causing them grief? Source: ATB Financial, Survey on Alberta SMEs, January 2013, 303 respondents. 49 % 26 % 17 % 16 % 15 % 7%7% 12 % 25 % 18 %

20. Business & Agriculture Albertas population is growing Source: Statistics-Canada, The Daily, Mar. 20, 2013. Albertas population grew by 3.0 per cent; more than double the national average (1.1 per cent). Doesnt this indicate Alberta has a strong labour market?.

21. Business & Agriculture What are the HR & Labour challenges? Source: ATB, Survey on Alberta SMEs, Jan 2013, with 147 respondents reporting HR & Labour is the most/ second most difficult.

22. Business & Agriculture What are the Sales & Customer Acquisition challenges? Source: ATB, Survey on Alberta SMEs, Jan 2013, 78 respondents reporting Sales & Customer Acquisition is the most/ second most difficult.

23. Business & Agriculture What are the Strategy & Future Planning challenges? Source: ATB, Survey on Alberta SMEs, Jan 2013, 75 respondents reporting Strategy & Future Planning is the most/ second most difficult.

24. Business & Agriculture Succession planning and Baby Boomers Sources: 1. ATB, Survey on Alberta SMEs, Jan 2013, 303 respondents & 2. ATB Customer Advisory Panel, Feb/Mar 2013, 284 business panelists. 42% of SME owner/operators report being 55+ years of age 1. Are Alberta SMEs ready for their succession? => Their businesses are 2-5 times more likely to be in the Mature or Winding Down phases. 48% of ATB Customer Advisory Panel business panelists (aged 55+) do not have a succession plan 2.

25. Business & Agriculture What are the IT (hardware & software) challenges? Source: ATB, Survey on Alberta SMEs, Jan 2013, 55 respondents reporting the area of IT is the most/ second most difficult.

26. Business & Agriculture What are the Operations Management challenges? Source: ATB, Survey on Alberta SMEs, Jan 2013, 50 respondents reporting Operations Management is the most/ second most difficult.

27. Business & Agriculture What are the Marketing, Advertising and Public Relations challenges? Source: ATB, Survey on Alberta SMEs, Jan 2013, 49 respondents reporting the area of Marketing, … is the most/ second most difficult.

28. Business & Agriculture What are the Accounting challenges? Source: ATB, Survey on Alberta SMEs, Jan 2013, 45 respondents reporting the area of Accounting is the most/ second most difficult.

29. Business & Agriculture What are the Risk Management challenges? Source: ATB, Survey on Alberta SMEs, Jan 2013, 37 respondents reporting Risk Management is the most/ second most difficult.

30. Business & Agriculture What are the Building & Office Admin challenges? Source: ATB, Survey on Alberta SMEs, Jan 2013, 22 respondents reporting Building & Office Admin is the most/ second most difficult.

31. Questions?

32. APPENDIX: Business Firmographics & Respondent Demographics

33. Business & Agriculture Majority of Alberta SMEs earn revenues in excess of $500,000 Source: ATB Financial, Survey on Alberta SMEs, January 2013, with 303 respondents. Of the SMEs we surveyed, more than half have fewer than five employees, over six in ten (61%) report earnings in excess of $500,000 in 2012. Number of Employees Annual Revenues 2012

34. Business & Agriculture Source: ATB Financial, Survey on Alberta SMEs, January 2013, with 303 respondents. Business Firmographics Business Life Stage Phase Intentional Growth 69% of SMEs are TRYING to grow their business

35. Business & Agriculture Business Firmographics Source: ATB Financial, Survey on Alberta SMEs, January 2013, with 303 respondents. $1MM + 13% Borrowing Needs # of Years in Operation MEAN 24 years

36. Business & Agriculture Business Firmographics Source: ATB Financial, Survey on Alberta SMEs, January 2013, with 303 respondents, responses mentioned by 3% or more are shown. Industry Franchise Industry (n=22) Automotive 4 Retail 4 Beauty & Fitness 2 Energy/ Oil & Gas Services 2 Financial Services/ Insurance 2 Health 2 Travel, Leisure & Accommodation 2 Non-profit 2 Education 1 Food Services 1 7% of SMEs are franchises

37. Business & Agriculture Business Firmographics Source: ATB Financial, Survey on Alberta SMEs, January 2013, with 303 respondents. Business Location(s) 53% of SMEs only conduct business in Alberta Business Scope

38. Business & Agriculture Respondent Demographics Source: ATB Financial, Survey on Alberta SMEs, January 2013, with 303 respondents, responses mentioned by 3% or more are shown. 42% 55+ Title/ Role Age

39. Business & Agriculture Respondent Demographics Source: ATB Financial, Survey on Alberta SMEs, January 2013, with 303 respondents. Role in Financial Decisions Gender

40. ATB Business Beat Email: businessbeat@atb.com URL: atb.com/businessbeat