Concurrently, the household sector is deeply in debt, potentially leaving Canada more vulnerable and accident prone. This concerns HSBC, given that global imbalances have widened in an echo of the 2007-08 financial crisis. Notably, the Bank for International Settlements, the BIS, recently singled out Canada, among all developed markets, for concern due to the pace of growth of household and non-financial corporate debt.
With other sectors limited, we feel that the federal government has room to provide stimulus. However, we think that the government stimulus efforts should include a focus on crowding in business investment by making Canada an attractive global investment destination. We need non-resident investment, but I believe we need to redirect it from bonds and residential real estate to more productive uses. We think that stimulus efforts should avoid crowding in the over-leveraged household sector. In fact, we think households should be encouraged to de-lever.
While there is naturally a desire to boost employment, particularly when job growth is sluggish, we must also focus on what we want from the workforce 10 to 15 years from now. As the expansion of the working age population slows, we need to ensure that upward momentum in incomes and living standards in maintained.
This involves improving human capital via skills training and skills mobility. Improving human capital should know no race, recognize no disability, pay no heed to age, and need not be dependent on or limited by geography.
Among the key structural headwinds to the economy is lacklustre productivity. Sparking innovation is critical for business investment and human capital formation to improve competitiveness and offset the slowdown in the working age population. These efforts will allow Canada to maintain a high standard of living and still compete with low-wage nations. To that end, we think that the corporate tax system should encourage growth rather than providing incentives to remain small. This is imperative, as there is scarcely a sector or firm that won't feel pressure from global innovations or competition, assuming global trade barriers continue to fall.
Thank you very much, and I look forward to an engaging conversation.