American Express Canadian Small Business Monitor

1. American ExpressCanadian Small Business Monitor Quarterly Tracking Survey – Q2 2010 May 2010

2. Methodology • From May 6-11, 2010, Angus Reid Public Opinion conducted an online survey among a randomly selected, representative sample of 564 Canadian small business owners who currently have between two and 100 employees. The margin of error for the total sample is +/- 4.1%, 19 times out of 20. The results have been statistically weighted according to the Statistics Canada Business Register’s most current business size and region to ensure a representative sample of the entire population of small business owners in Canada. Discrepancies in or between totals are due to rounding. • In addition, sample boosts were obtained in national major markets to facilitate isolated investigations in each of these areas. Total samples in these major markets include: Toronto (101 completes), Vancouver (77 completes), and Montreal (51 completes). • Angus Reid Public Opinion polls are conducted using the Angus Reid Forum online panel (www.angusreidforum.com), which is recruited via an industry-leading process that incorporates a randomized, widespread invitation approach and a triple opt-in screening procedure. The panel is maintained through state-of-the-art sampling techniques and frequent verifications of personal identity, contact information, and demographic characteristics. • Angus Reid Public Opinion is a North American full-service polling and market research firm which is a leader in the use of the Internet and rich media technology to collect high-quality, in-depth insights for a wide array of clients. Dr. Angus Reid and the Angus Reid Public Opinion team are pioneers in online research methodologies, and have been conducting online surveys since 1995.

3. AMEX Small Business Index • Based on a series of measures designed to gauge confidence, performance and attitudes of Canadian small business owners, Angus Reid Public Opinion and AMEX Canada have developed the AMEX Small Business Index. The AMEX Small Business Index is a grade given to the overall environment in which small business owners in Canada must operate. • The AMEX Small Business Index for Q2 2010 is 66%, or “C”. • This marks a 1% improvement over results from the previous quarter, and a 5% improvement compared to the Q1 result in March 2009 when the AMEX Small Business Index was 61% (C-). • As the following slides will illustrate, the financial position and outlook among Canadian small business owners appears to be holding steady following a peak achieved in Q1 of this year. Specifically, there is moderate improvement on some measures (continued erosion of stress, increased projections of business improvement, slight increase in confidence), while others exemplify the new-found stability, with a growing contingent reporting that they do not expect much change for their business in the upcoming year.

4. Small Business Hot Topic Business Forecasts • While a majority (58%) of small business owners project that their business revenues will grow over the next 12 months, nearly one-quarter (23%) foresee a decrease in revenues in the upcoming year. • Available cash flow is seen as the greatest weakness for small businesses. Business owners see their products and services as being their greatest asset. • Decreases in competition, and change in technology are seen as opportunities for businesses, while costs of raw materials and increased competition are viewed as threats. • Most small business owners have some ideas as to how they will run their business over the next 12 months. While one-in-five business owners (20%) have a formal business strategy, 17% do not have a plan. • Despite only one-in-five small business owners having a formal business strategy, nearly all (93%) feel they are prepared to navigate their business over the next 12 months.

5. Section A:Quarterly Tracking

6. The Index shows a five-point increase over the last year, from 61% to 66%. Montreal and Vancouver business owners rate higher than the national average (76% and 69%, respectively), while Toronto business owners place two points below the national index measurement (64%). Index Tracking Montreal Vancouver Total Toronto Letter grade thresholds highlighted: ■ B- = 70-72% ■C+ = 67-69% ■C = 63-66% ■ C- = 60-62% 6

7. Current Financial Position Continues to Improve The number of small business owners citing a downturn has dropped to its lowest point since tracking began (down 14% to 37%). In addition, this quarter sees a significant rise in the number of Canadian small business owners who report they are experiencing “no change”. 37% Downturn (-14pts) 35% Improvement (+5pts) Question: “When thinking about your business’s current financial position (e.g., revenue, profitability, etc.), which of the following statements best describes how you feel right now?” [n=564] - 7 -

8. Future Financial Outlook Positive, but Stabilizing The future financial outlook appears to be stabilizing with little movement in both hope and worry among small business owners since the previous quarter. 50% Hopeful (-4pts) 25% Worried (-2 pts) Question: “When thinking about your outlook for your business’s future financial position (e.g., revenue, profitability, etc.), which of the following statements best describes how you feel right now?” [n=564] - 8 -

9. Business Owners Continue to Agree That Reward and Opportunity Outweigh Risks and Challenges Perceptions that the benefits outweigh the drawbacks of being a small business owner have stabilized across the last three quarters of tracking. Agree (strong/moderate) Question: “How much would you agree or disagree with the following statement? ‘Even in these turbulent economic times, the rewards and opportunities of running my own business outweigh the risks and challenges.’” [n=564] - 9 -

10. Stress Levels Continue to Erode for Small Business Owners Overall, net stress has decreased slightly over the last quarter (-4 pts), and significantly from one year ago. Stressed (extremely/a little) Question: “How much stress is the state of the economy causing you right now?” [n=564] - 10 -

11. Small Business Confidence – Continuing Evidence of Pervasive Optimism While the intensity of confidence is not improving, this quarter sees an increase in overall confidence (+3 pts), for a total increase of six (6) points since September 2009. Those saying they are not very confident has steadily eroded over the same period. Note: Vancouver business owners are most likely to be very confident (31%, vs 18% of those living in Montreal and 10% of those living in Toronto). 82% Confident (+3 pts) 18% Not Confident (-3 pts) Question: “How confident are you about your business prospects overall over the next six months?” [n=564] - 11 -

12. Willingness to Take Risks Has Stabilized The proportions of those willing to take significant, average and moderate risks remain largely unchanged from last quarter. 23% Significant/Above Average Risk Takers (-3 pts) Question: “Overall, how willing are you to take risks related to your business over the next six months?” [n=564] - 12 -

13. Decreased Willingness to Take Specific Financial Risks Montreal (n=41*) Toronto (n=86) Vancouver (n=64*) Net Change Since Jan For the first time since September 2009, there is a significant decline in the number of small business owners who plan to assume the risk of investing in new equipment and capital expenditures over the next six months. Other types of risk respondents plan to take on are largely unchanged from last quarter. Of note is the higher percentage of Vancouver business owners who plan to assume financial risks (compared to operators in other major markets). - 13 - * Caution small base size Question: “Specifically, which of the following financial risks are you willing to take over the next six months for your business?” [Base: Willing to take risks, n=465]

14. Section B:Hot Topic Analysis

15. Majority Forecast Increase in Business Revenues Over Next 12 Months A majority (58%) of business owners project an increase in revenues over the next year, of which half expect the increase to be moderate. One-quarter (23%) of business owners project a decrease during the same period. A significant increase9% A moderate increase49% A significant decrease5% A moderate decrease18% Not forecasting a change in revenues19% Question: “Are you currently forecasting an increase or a decrease in your revenues over the next 12 months?” [n=564] - 15 -

16. One in three Project Revenues Rising Between 10% and 19% Over Next 12 Months Amount of change forecasted almost equivalent between those who project an increase or decrease in revenues: Average percentage increase projected: 24% Average percentage decrease projected: 21% Note: Vancouver business owners project a larger average increase (40%), compared to 24% among Toronto and Montreal business owners. Increase % change Decrease B2i. Using a percentage, please indicate approximately how much of an increase in your organization’s revenues you are forecasting over the next 12 months [n=332] B2ii. Using a percentage, please indicate approximately how much of a decrease in your organization’s revenues you are forecasting over the next 12 months. [n=133] - 16 -

17. Products and Services Greatest Business Strengths Products and services, management and marketing abilities are cited as top strengths to benefit business over the next 12 months. Neither Strength nor Weakness Strength (Strong/ Moderate) Question: “When thinking about the next 12 months, please indicate if you expect each of the following to be a strength or a weakness for your business?” [n=564] - 17 -

18. Available Cash Flow is Greatest Business Weakness Available cash flow, compensation costs and debt management are identified as greatest weaknesses impacting the same period. Neither Strength nor Weakness Weakness (Strong/Moderate) Question: “When thinking about the next 12 months, please indicate if you expect each of the following to be a strength or a weakness for your business?” [n=564] - 18 -

19. Decreasing Competition and Changes in Technology Seen Most Often as Opportunities for Small Business Notably, more than one-half of small business owners are ambivalent about the impact of globalization and real estate costs. Opportunity (Significant/ Moderate) Neither Opportunity nor Threat Question: “Please indicate whether you think each of the following factors represent a threat or an opportunity for your business over the next 12 months.” [n=564] - 19 -

20. Increased Competition and Cost of Raw Materials Seen Most Often as Threats for Small Businesses A majority of small business owners indicate that increased competition represents a threat for their business in the next 12 months. Neither Opportunity nor Threat Threat (Significant/Moderate) Question: “Please indicate whether you think each of the following factors represent a threat or an opportunity for your business over the next 12 months.” [n=564] - 20 -

21. Majority Have “Some Ideas” for Business Approach for the Year. One-in-Five Have a Formal Strategy Question: “Which of the following best describes how you plan to approach the next 12 months of your business?” [n=564] - 21 -

22. Nearly All (93%) Business Owners Feel Prepared to Navigate their Business in the Upcoming 12 Months Business owners in Montreal are most likely to strongly agree that they feel prepared – 49%, compared to 30% of those living in Vancouver and 27% of those living in Toronto. Strongly Agree % Total Moderately/ Strongly Agree % Agree They Feel Prepared Strongly Disagree Moderately Disagree Moderately Agree Question: “Please indicate whether you agree or disagree the following statement: Considering the strengths, weaknesses, threats and opportunities identified above, I feel prepared to successfully navigate the coming 12 months.” [n=564] - 22 -