Of course there are many risks. As you indicated, we've never been here before, so the signposts that we're reading are not as reliable as usual. I can say flippantly not to worry about inflation; inflation depends on demand and supply and it always has, but we don't know for sure how much demand has been suppressed by COVID-19, how much the policies we're putting in place will translate into more demand, and what the supply side is doing.
When I talk about scarring, I'm talking about permanent losses of companies, jobs, and industrial or commercial capacity. That means that if supply is coming down when demand is rising, of course that would have inflation potential.
The way I portrayed our response is that we should be playing those odds. What risks do we want to manage? Well, let's have policies that increase investment, both directly—such as in infrastructure and social infrastructure like child care—and in incentives to vastly increase investments in carbon capture, for example, which is investment, but on the green line. Those things add to capacity and are anti-inflationary in their effect, so they mitigate that risk of an outbreak of inflation.
Central banks, of course, are watching this much more carefully than I do. Their job is clear, so I have complete faith in how that will turn out. A fourth wave or a fifth wave are major risks that we face. Sectors that are struggling, as I said, can translate into exits.
I would just say on this that there have been many company entries and many firms created during this episode. I was quite amazed: We lost more than 100,000 businesses during last summer, but by the time we got to the end of the year, we had gotten back over 80% of the businesses. They're not the same businesses. They are brand new businesses that are entering the market in the middle of a pandemic. This shows how resilient the Canadian economy is.
The last risk I'll mention is that I think there's a risk that there will be some form of a crisis somewhere else in the world—an emerging market crisis. Some countries do not have the institutional capacity or the fiscal capacity that we have, but they're dealing with the same problems that we are—countries like Brazil, for instance.