Thank you, Ms. McLeod. It's a very important question.
Let me first back up to the experience during the recession, where business fixed investment fell sharply in this country. It fell more sharply than it did in the United States—and particularly, I'm speaking about investment in machinery and equipment. It wasn't entirely clear why that was the case, because the financial system was functioning better here, and the direct impact of the crisis was obviously somewhat derivative. We were affected by a crisis somewhere else, as opposed to being directly in the United States. As you suggest, over just about the past year and a half, business investment has picked up importantly in this country. In fact, the relevant slide is chart 30 in the MPR , which shows how sharp that decline was relative to previous recessions. It is now stronger than it had been in previous recoveries at this point.
We are just at a point where the level of business investment is back to the level it was before the crisis. We've just come back to that point, so this is really the crucial moment or the crucial coming quarters and years for whether we're going to sustain our businesses, as Mr. Manley suggests, who are going to sustain that pick-up in investment and are going to start to build the productivity that we will need in a tougher global environment.
We would say that despite the global uncertainty, all the other conditions are there, as per Ms. Glover's question about emerging markets and those opportunities. Our financial system is functioning very well. This is a fact, not just a slogan. It is true. Our businesses have balance sheets that are in tremendous shape. So there's the ability to invest. We think there's a need to invest, because of the productivity challenge as well as the opportunity in emerging markets. We expect that there will be continued levels of investment, albeit at a slower pace than over the course of the last year. The reason for that is partly because of the global uncertainty that is, on the margin, slowing plans a bit. It's still positive, and it's still central to the forecast, but it is not quite as aggressive at this stage as it was previously. That's one of the reasons why a resolution of the European crisis will ultimately matter for Canada.