High-quality infrastructure in the form of transportation systems, power-generation facilities and, more recently, telecommunication networks (some of which may be provided privately) are essential to modern production processes, especially given the accelerating digital transformation of the global economy.7  Business investment since the great recession As I mentioned earlier, business investment collapsed during the Great Recession, and its much-weaker-than-expected recovery since, despite historically low financing rates, has been a major source of disappointment in advanced economies.8 The challenge for policy-makers, including us at the Bank, is to assess how much of the weakness in business investment reflects the dynamics of the business cycle and how much is due to structural forces.
This distinction is important for our projections for demand and for potential output or supply, which are critical to our monetary policy decision. Focusing on Canada, let’s consider the possible impacts of cyclical and structural forces on investment over this period.