Stronger housing activity also means more household debt, of course, which continues to be Canada’s biggest financial system vulnerability. The good news is that with the B-20 guideline working to reduce the riskiest borrowing, we are confident that the stock of household debt is becoming less of a threat over time. Assessing the economy’s capacity The third area is business investment.
Bringing the public finances back into balance is necessary to restore macroeconomic stability and to ensure international confidence in the economy on which, as a small open economy, we are so dependent. As the bulk of the fiscal problem is of a structural or underlying nature, a cyclical recovery in economic growth cannot be relied on to restore order to the public finances.