hit a trough earlier this year at nearly five percentage points lower — the lowest in almost 20 years. if we could return the youth participation rate to its level before the global financial crisis, more than 100, 000 additional young canadians would have jobs. of course, this is not only a problem for youth. we know of people in all age groups who are working part - time when they would prefer a full - time job. we also know people who cannot find jobs that match their skill set and are underemployed. and we know there are people who have lost the job they held for years when their factory closed, and have faced extreme difficulty in finding new work in a similar field. these are all serious concerns. but i want to concentrate on young people, for whom a long period of unemployment can leave a scar that could last a lifetime. i know there are legitimate explanations for why more young canadians are staying out of the labour force. enrolment in post - secondary schooling has increased in recent years, and we expect some of this rise will be permanent. some of these youth are looking to gain the skills that will match what employers are demanding. there are more than 250, 000 job vacancies in the economy today, the highest on record. canadian business leaders say that most of these vacancies are unfilled because they cannot find workers with the right skills. let me suggest that responsibility for addressing this skill mismatch rests with all of us, not just the students and the education system. there surely is room for more ambitious on - the - job training programs in this picture. this issue is taking on greater urgency because the economy is reaching the stage where moreefficient job matching and increased workforce engagement will be our main means of building economic capacity. with more economic capacity comes the opportunity for more noninflationary growth and a permanently higher level of canadian gdp, and more income for everyone. clearly, that is something worth having. let me elaborate. right now, we are at a point in the economic cycle that i think of as the “ sweet spot. ” we know that a majority of canadian companies are running flat out. they may have been hesitating to invest in new capacity until now, perhaps because of lingering economic uncertainty, or concerns over the future of nafta, for example. but, despite these uncertainties, companies are moving to expand their capacity now, which augurs well for the future. most expansion

like to emphasize that we are being prudent in our outlook. in fact, total investment as a share of gdp is flat over the projection horizon. i ’ ve been in the forecasting business long enough to know that one of the toughest things to call is when intentions will translate into investment decisions. structural factors affecting investment i also don ’ t think the trade war is the only reason for the disappointing investment in canada and globally. even before the latest slowdown, a downbeat outlook among firms about the strength of future demand contributed to weakness in global business investment in the years that followed the crisis. 9 a couple of structural issues are contributing to this. the first is demographics. population aging is limiting the growth of the workforce in canada and many other economies. this reduces the future returns to any investment by limiting 7 for an excellent discussion of this theme, see j. haskel and s. westlake, capitalism without capital : the rise of the intangible economy, princeton university press ( 2017 ). 8 this assumes a constant relative price for investment in the oil and gas sector. 9 see r. fay, j. - d. guenette, m. leduc and l. morel, “ why is global business investment so weak? some insights from advanced economies, ” bank of canada review ( spring 2017 ) : 56 – 67. - 6the economy ’ s potential growth rate. 10 the second issue is that the boost to world trade and investment that came with china joining the world trade organization in 2001 has run its course. governor poloz spoke about this last month in iqaluit. 11 these longer - term structural issues aside, canada is trailing on a number of indicators that we know increase productivity and competitiveness. 12 among these are investment in information and communications technology and in research and development because other countries have been investing even more than we have. and, companies across the country tell us that a number of other competitiveness issues are holding back decisions to upgrade or expand capacity in canada. these are wide - ranging and include business costs, such as electricity, and the regulatory burden as well as uncertainty around approvals for projects. and when i ’ m talking with business leaders, i often hear about the costs and lost opportunities because of barriers to interprovincial trade. so, as business leaders and policy - makers, together, we have our work cut out for us. these issues can ’ t be resolved by central banks. still, to do