I'm Barb Amsden, director of the Investment Industry Association of Canada, or the IIAC.
I am pleased to share with you some comments from our association, the IIAC.
Our 170 members, with 40,000 employees across the country, range from small regional institutional and retail boutiques to national full-service companies. The interests of our members and the country's economy are closely aligned, with our members raising nearly $130 billion in equity and debt to fund businesses, not-for-profits, and all levels of government last year.
We continue to face a sluggish domestic economy and global recovery, a high Canadian dollar, and turbulent capital markets. Investors are skittish about the markets, and corporations are holding cash in reserve, now 30% of GDP, three times the historical average. The effect is that capital spending on productive investment has declined. In Q3, there were only seven IPOs valued at $270 million, compared with $540 million in 20 IPOs last year. At the same time, household debt is increasing, with base demographic shifts that will demand new ways of thinking to provide for health care and support systems for an aging population.
To cope with these challenges, government must rely on revenue from sustained economic growth and continued efficient program spending. We commend the federal government's continued prudent financial management and recommend that this continue. We urge government to keep the current competitive corporate tax rate level. Lower rates have not led to a decline in corporate tax revenues; in fact, quite the contrary. On the household debt side, we support the government's tough love decision to tighten mortgage lending rules.
While good fiscal management, competitive taxes, and balanced borrowing are key parts in the investment cycle, we need increased individual and corporate investment. Just as a circulatory system is vital to the healthy functioning of every human being, the circulation of our savings is critical for our economic health.
At the top of a handout, you'll all have something with squiggles all over it, with a generally blue colour. You'll see a stylized view of the economic circulatory system showing money saved by millions of Canadians becoming productive investments, generating jobs, leading to taxes, and contributing to a better standard of living for Canadians who save and so on. That's the kind of round diagram you see before you.
The second diagram below it shows, within the investment capital formation part of the cycle, the role of seed money, angel investors, venture capitalists, and regulated investment dealers, who are our members. Our members channel savings of Canadians into private and public investment instruments, such as stocks and bonds. Blockages at any point in the system can have serious consequences, and we think there are some blockages at various stages. A number are due to our genetics, our economy's composition. Sixty per cent of the TSX index are energy and financial institutions. Some blocks are environmental, the uncertainty in the U.S. and the eurozone. Others have risen when prescriptions taken to address one problem have caused harm elsewhere.
Neither our large national nor our small regional members can do what they do best without a steady flow of smaller companies growing to the size when the services our members offer come into play, and our members can't do as well as they might at that stage due to increasing costs.
As with our personal health, we need preventive and restorative measures, and we propose antidotes that we think you can recommend, and also rely on your power to draw attention to ones you cannot. The symptom of our weak economy is not enough capital at key stages in the financing cycle, particularly capital-intensive—