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Hello everyone and welcome to Economic Impact. Today is May 14, 2024 an I am with our Chief Economist, Stéfane Marion allows the fan.

Good morning, Denis. How are you today? I'm good.

Good, once again. we are going to talk about performance on the stock market.

Yes, it wasn't a very good month in April. As you recall, we spoke to that last month. But so far this month we've regained some of the loss ground. Then global equities are slightly up on the quarter, Denis. Still comfortably up year to date, but on the quarter, we've regained the ground lost in April. Note that Canada is actually outperforming by a little bit the global index, so that's a bit of a change.

Is this widespread in Canada or is it only very few sectors?

No, it's quite narrow, Denis. It's, it's, it's mostly a reflection of what's happening in materials, gold prices, mining stocks and also the energy sector, up 3.7% in the quarter. Note that, year-to-date materials up almost 18%, almost 16% for energy. Were it not for these two sectors, we wouldn't have a positive return year to date on the S&P TSX. So, it's still narrow.

But, because of expectation on rates and rates seem to be reaching a plateau right now.

Well, I think the reason the market has been expected, you know, has done well year-to-date as a reflection of expectations that you know central banks are done with monetary tightening. You can see that in emerging markets, I mean some countries that I actually slightly lowered interest rates. As for the advanced economies, we saw Sweden coming down with rates. Europe's about to start, but the big question is what will happen in you as the second-half this year. This is what the stock market is looking at right now.

Yeah, but when we're talking about rates in North America, we're talking about inflation. But inflation has to come down to see rates coming down.

But it's not right now. Not collaborating. Not so far. This is CPI week this year. But if this week is CPI week - if you look at the PCE deflator, which is the Fed's preferred measure of inflation, we have 3 consecutive months where the monthly change in inflation annualizes well above the 2% Fed target the last reading. We had was close to 4%, so clearly this is not a Fed friendly number. An you know it's all due because of labour market once again. Well, I mean if inflation is not collaborating then you got to look at what's happening in wages and clearly that's not helping either. And labour compensation is actually accelerating on the quarter. This is what's happening when you deploy massive fiscal stimulus would on an unemployment rate below 4%. So at 4.8% , Denis, it's just not Fed friendly. And, so I'm not saying that the Fed won't be cutting rates this year, but I think it's going to be at the very end of this year. So right, cuts are coming, but maybe not as aggressively as we thought. So hands from the stock market perspective, you might limit somebody upside.

Yeah, and if we're coming back in Canada. So we just had the employment numbers, still a good number.

90,000 jobs created in April. That is almost five times above expectations. But you know what, Denis, the unemployment rate did not come down, so the door is still open for bank account or rate cuts. And the reason the unemployment rate did not come down is that, unlike expectations, population growth is actually accelerating so far in 2024. So note that historically over the first four months of the year normally population rose 110 thousand, last year was 280,000 on the first four months, which was an all time record high, but you know, new record this year. Up 47% above the all-time high recorded last year. More than 400,000 individuals, Denis, that is a new record, all time record, this is unprecedented.

Are you predicting a new record this year in terms of population growth once again. Well, to be honest, it's been 2 years in a row now.

Yeah, I know to be honest I thought that we might decelerate this year but based on these numbers you're likely to accelerate. And the reason for that, Denis, is Ottawa has warned people that starting in 2025, there will be some limits on foreign students and temporary workers. So, some people have probably front loaded their decisions to come to Canada. So, it's likely to be a new record in terms of population growth again this year.

And when we're talking about inflation, rent inflation also big part of that huge number that we have.

Remember when we said in the passage you quote David Foot, the most famous Canadian demographer, he once said demographics explain two thirds of everything. So would you have this type of demographic shock, you shouldn't be surprised to see rent inflation moving higher. So, Canada wide, where at 8.5%, which is the highest level since 1980. In provinces such as Alberta where population growth is the fastest in the world. We're talking about rent inflation at 14%. So, at 8.5% you have limited downside. So what that means it keeps inflation slightly elevated versus expectations. So, it means it doesn't mean that the Bank and I won't be able to cut rates. I think they will be able to cut rates, but it won't be as aggressive as what we've seen in the past. So, you have to be prepared for rate cuts, but not massive rate cuts.

Yeah, Thank you. Last month you started talking about electricity consumption in the US. If we do the same thing in Canada, how does it look?

Big surprise here too. So, in the US we know electricity demand is surging on the basis of manufacturing reshoring. From a Canadian perspective, it's not the case is not manufacturing reshoring. Again, it goes back to demographics explain two thirds of everything, and with surging population we've had it 4 million people over the past four years. We're on track to add four million people in the past 4 years, but that's what we normally do in 10 years, right? So yeah, I don't think Ottawa was ready for this type of growth or this change in trend in terms of electricity demand. So, after 15 years where we outsource manufacturing production to China or the rest of Asia manufacturing, electricity demand was quite stable and we're now at an inflection point. This is surprising. Everyone, every country is being surprised by this right now, this surge in demand for electricity. It's population growth, but also massive demand from AI, right?

For sure. But at the same time, because of that, it's the first time that we're seeing deficit in electricity production in Canada.

Well, you want to see how surprised you can be when you don't plan for that, do you? And, when there's less hydroelectricity available from BC or Quebec, because the water reservoirs are a little bit depleted, you end up having the first Canadian electricity deficit on records. So last winter we were forced to import electricity from the US. Which is produced from natural gas and coal. So that's a big surprise. I don't think anybody expected this and that's a big deal. So, you have to be prepared for rising demand that might lead to that. So, we need to add capacity here too.

Yeah, I'm talking about natural gas because now Ontario needs more electricity. They need more natural gas to produce that electricity. Well, which is a big change.

Again, demographics explain two thirds of everything. So from an Ontario perspective, think about the GTA. The Greater Toronto Area saw its population growth accelerating 66% above last year's level, which was in all-time high. So, on the GTA alone, you've added 100,000 people in the first four months, which is unprecedented. That means there's more demand for electricity, and the electricity capacity at Ontario has at this point in time comes from natural gas. Hence the reason why the natural gas electricity production, well the electricity production from natural gas actually more than doubled over the previous year. And it's likely to remain on an uptrend, Denis, because we have even yet to start producing all these electrical vehicles that will demand a high proportion of electricity. And what population growth so strong. I think what it does the need it argues for probably the need to probably push back those decarbonization objectives that have been put forward from a Canadian perspective again, we never thought we would get this type of demographic surge, so we need to adjust to this situation.

Thank you, Stéfane probably more question marks that we have in our head now than we had previously, but very interesting and thank you all for being with us. Above all, don't miss the next meeting early June until then, thank you.

Hello everyone and welcome to Economic Impact. Today is April 16, 2024, and as usual I am with Stéfane Marion, our Chief Economist. Stéfane, welcome again.

Good morning, Denis.

We have to come back to you know performance of stock market in this start of the quarter.,

Not that great. No, it's pretty much negative across every region, Denis. Still positive here to date, but there's some malaise in the market at this point in time to start the second quarter, Denis.

And, that malaise is probably linked to inflation once again.

Yeah, the big I world where the inflation numbers are not good, particularly in the US, it's been accelerating over the past three months. If you exclude the housing sector, you're running at roughly 8% annualized rate. The market was not happy to see this, Denis. And what that does is that if you recall back in November, Jerome Powell went on the record to say that I will have the ability to reduce rates aggressively in 2024. Well, with these inflation numbers, you know this, you know the bond market does not believe that anywhere. So, it's pretty much back to square one for the Fed with the bond market probably targeting, you know a level of 5% again just where we were last November.

Yeah, it's a nice comeback, but at the same time we have gold making new height.

Yeah, it's not just the bond market that's doubting the Fed's ability to cut rates, Denis. The price of bullion now is at an all-time high above $2200 an ounce. U.S. dollars by the way. But adjusted for inflation, the blue line was still 20% away from the all-time high that was reached in the 1980s, which was above $2600. Denis, I'm going to make a forecast, I think we will get closer to that record high in the coming quarters to reflect you know the global uncertainty related to inflation but also the geopolitical backdrop.

But talking about uncertainty, at the same time, you know we have a stock market going, going very well and the way you compared to Fed fund, there's a question that should come in the head of investors, right?

Well, the valuation question is a good one, Denis. And if you look at currently the return you get on the earnings yield on the SP500 versus the Fed funds, for the first time in over a generation, you get a higher return on just holding Fed funds as opposed to buying the stock market. You're just not compensated for the amount of risk that you're taking in the stock market unless you think that the Fed is able to cut rates aggressively in the not-too-distant future. So again, they need to see this type of stretch valuation, you have to go back to 1998. It's a type of stuff you don't see very often. So the Fed has to be able to cut rates quickly, if not, you have to reassess your valuation in the stock market. Hence our reason to be a little bit more prudent at this point in time.

Either or, rates will go down or stock market will go down.

Yeah, you're absolutely right.

But you cannot keep going like it is right now, that's unsustainable.

Yeah.

And at the same time, uncertainty about policy makers is not that great too.

Well, when you're trying to forecast your earnings guidance, you try to say what's my outlook in terms of economic policy. It's not very stable right now, Denis. Or if it's stable, it's very stable on the high end of risk and economic policy. The average of the past five years outside norm that we've seen since 2015. So from a stock market perspective, you know that's not that great to cope with both monetary policy uncertainty as well as economic policy uncertainty that reflects the more complicated geopolitical backdrop. We just saw what's happened with Iran and Israel right now. I mean this, this is complicated right now.

And all of that, you know, US small business index is still going down.

Well, yeah, you're right, like consumers, corporations don't like uncertainty. And small businesses in the US who account for 50% of job creation, they need are not very confident right now. It's actually the lowest level of confidence since the great financial crisis. So that argues for a more tepid job creation environment for the US in the months ahead, so yeah.

And there's one thing going up though, demand for electricity.

Well, that's surprising because if you're a small business, you're coping with, you know, monetary policy uncertainty, geopolitical uncertainty and now energy price uncertainty because for the first time in a generation, US electricity demand is on the upswing. That was not supposed to happen. No one was forecasting this, Denis. And the reason for that is we all knew that the US was planning to reshore manufacturing activity, but no one guessed that IA, artificial intelligence, AI was going to be deployed so quickly and that is so energy intensive, Denis. Now you have to increase your energy production or electricity production. And in the US, it mostly comes from natural gas and coal for 60% of electricity generation. So, what that means is for everybody that was saying, well, all these governments have these plans to decarbonize over you know, X many years, all of a sudden with surging demand on electricity, you have to push that back. So again, the uncertainty is even at the decarbonization level, what can government do under these circumstances? What it says to me, Denis, I think those targets will have to be pushed back, unfortunately, because you can't reshore and do AI with no electricity consumption.

Yeah. And you cannot build those dams at the speed that we need to achieve those goals.

Alternative energy cannot be deployed as quickly as demand is rising right now. So, yes, it means more uncertainty on that front too.

And more to come on that front. But at the same time this morning we had a Canada inflation. Any surprises?

OK, I'm here to provide some good news, right. So yes, the good news was that the Canadian inflation was actually lower than expected. Denis, having said that headline inflation is at 2.9%, which is a ball well above the 2% range by the Bank Canada having said this, it's mostly driven by shelter, which is at six points, you know close to 7% right now as you can see on the slide excluding shelter however, you're at 1.4%. So, Denis, to me, clearly those inflation numbers open the door for rate cuts in Canada before the US So we're going to get them here before the US for sure this year.

That's why the Canadian dollar is at 1.38 right now or so?

Again, everything correlates with something else. And yes, under the circumstances you're going to get a weaker Canadian dollar, which has been our forecast for quite some time. So, we're probably looking at another three to four cents depreciation of the currency. It's had a significant depreciation over the past few weeks. Expect a little bit more because now the markets have to reassess the fact that yes, the Bank Canada is able to cut rates before the Fed. So, there's a new currency impact on that.

Then to bring down that inflation due to shelter, we need to build houses... And a lot.

Yes. So finally in Ottawa they've concluded that the only way to bring down shelter inflation is to increase the supply of shelter. So, they have deployed a very ambitious plan to build formula and homes in the next seven years. So that would be doubling the number of homes starts versus what we have right now. It's very ambitious, Denis, and at the same time, it comes against a backdrop where we already have a record number of share of the workforce employed in the construction sector. So, it's we don't, we don't just need people to build homes, right. We, at the same time, need more schools, more hospitals, more roads, more sewers etcetera, etcetera. So that means that if there's one sector that's going to be busy and for the foreseeable future, it's the construction industry which is not bad news because it will limit the downside to the economy, but clearly something that might be supportive of the economy. But it's a very big challenge to meet the goals that were presented on April 12th by the federal government. Doubling home starts at this point in the cycle is a tall order, but at least we're going in the right direction.

On that note, thank you, Stéfane. Thank you everyone, for being with us. I will see you next month.

Hello, everyone and welcome to Economic Impact. Today is March 19, 2024 and as usual, I am with our Chief Economist, Stéfane Marion. Hello, Stéfane.

Morning, Denis.

Good morning.

Well, another month, same story. Equity is still doing very, very well, but not only in the US right now. Yeah, another month, another record. And you can see it's not solely driven by the US right now. The blue line is the overall equity markets global. The red line is excluding the US. So it seems like people are interested in buying something cheaper elsewhere. So therefore they're buying other country stocks and it's moving the needle higher for equity markets.

Well, good for them, but at the same time not all the economy are going in the right direction.

You're buying on hope, Denis, because economic data is not very constructive right now. It's mostly PE expansion, so price earning expansion, as you see on the slide, we only have 3 countries in the G7 economies that are contracting and 3 others that are stagnating. So really, it's the US that stands apart from other countries. But I assure you any monetary policy is restrictive in every country.

OK. But at the same time in the US we are seeing and keep seeing a very, very big deficit.

Yeah. So if you're asking me why the US is doing so much better than other countries, because I had not forecast unprecedented government deficits in the US, Denis, running at roughly 6% of GDP right now. It's unprecedented to see this type of fiscal stimulus at this at, at this point in the cycle. So were it not for the government, I assure you the US economy would be much weaker than it is right now.

Yeah, and we are in an election year. That means that they may stay like that for a while.

Yes. But it depends on what the impact will be. Also on interest rates down the road. If you de anchor inflation expectations because of massive deficits in the US. Yeah.

And at the same time we're seeing a contraction in employment, which is kind of unusual because you know we are having such a big deficit, we should create more jobs. But even if the jobless rate is at 4% or so, we're creating less and less jobs.

The impact on the private sector coming from restrictive monetary policies, particularly small businesses, Denis. So if you look at full time employment in the US, it's been stagnation for the past 12 months. So corporations, in order to salvage their guidance on profit margin expansion, are forced to reassess their needs on the labour market and therefore they have opted to hire people part-time nowadays as opposed to a hiring them full time. And that speaks to me to a potential deceleration in the US economy in the months ahead. And we're going back in history and you're bringing back the bank, you know, problem that we had in the regional banks last year and the next slide I think showing that we should be concerned now.

There is stress in the private sector. If you don't hire people full time, should you be surprised that we're seeing delinquency rates on the rise for consumer loans and credit card loans, which by the way, are higher than they were at the height of the global financial crisis in 2008, 2009. So that speaks to me, Denis, in saying that you know what, yes, the consensus is expecting a soft landing for the US economy. Perhaps that will happen, but that's not our baseline scenario because we view this stress as symptomatic of significant deceleration to come in the US not withstanding massive government support. At this point in time, I still think we're going to see significant economic slowdown and therefore you'll be forced to reassess your profit expectations.

OK. Then maybe on a better note or not, if we are coming back in Canada on the employment sector. How does it look now?

Denis, no but I want inflation to come down! But if you want inflation to come down, you gotta slow the private sector. So it's slowing in the US, so let's not be surprised, but let's be prudent on equity exposures at this point in the cycle. So in Canada, not much better than any restrictive monetary policy is impacting the private sector. And you can see on this slide that it's been stagnating for the past six months. So were it not for public sector employment, labour markets would be much weaker than what we've seen so far in Canada.

At the same time, we're not investing enough in the Canadian economy.

No, we're not. And two things, private sector slows in terms of employment. We've seen a resurgence in business insolvencies which are back to where they were in 2008. So Denis, that's not great for productivity down the road such as the private sectors being negatively impacted by restrictive monetary policy.

And you know if we're coming back to the GDP versus the US in term of PPP, how do we look?

Well, first of all, on productivity, we're not doing well at all. So that's a reflection of what you said. We need to attract investment in this country. And what we've seen is that the most recent data speaks to 3 consecutive years of declining productivity. So what that says, Denis, is that in order to get the economy to do better in the months ahead, we need to attract investments.

And that's kind of new. Three years in a row and we are accelerating right now compared to last year. Yeah, it's a big concern.

It's unprecedented and if you don't have good productivity, it will be reflected in earnings expectations and will be reflected in the relative performance of equity markets around the world. So we're definitely not doing well. And it's a reflection also of what you see, this discount of the S&P TSX relative to the S&P 500, is investors, whether they are Canadian or foreign, are shunning the Canadian market right now. So as the data on productivity was published, Statistics Canada also showed that for the first time since 2007, both foreign and domestic investors were taking some of their marbles out of the Canadian market. So therefore, yeah, that explains the relative underperformance of the Canadian economy. So basically, it's really important in the next federal budget, Denis, that the federal government comes up and with a more business friendly environment to encourage institutional investors to bring back investment to this country. We need a more business friendly environment in this country.

And it's even worse when you compared to the US. Oh, if you don't want to do that, Denis, then we're just going to get, if you don't do anything, we're going to get this continued deterioration on the relative standard of living between us and the US. So per capita GDP in Canada, which used to be 82% of the US, right now is down to 76%. So we're earning, you know, 1/4 less than what the Americans are earning right now just because of this, this deterioration in productivity, which is symptomatic of lack of business investment in this country. And this is why we need this next federal budget to be more business friendly to attract investment to the country.

Last but not least, one of our favorite subject, inflation, and we have a very fresh number this morning. How does it look?

It just came out, Denis, so CPI was very, very low for this month. So you're down below 3%. But then if you exclude the shelter component on which the bank had is has no control, you're at 1.3%. So that to me opens the door for potential rate cuts in Canada this summer. You know you can't justify keeping monetary policy as restrictive given what's happening in the private sector, which we've been talking to for the past few minutes. The Bank of Canada has to change its forecast and open the door for rate cuts as soon as its next monetary policy. Meaning, they may not cut rates in April, but I think they will open the door for rate cuts this summer.

OK, is it too late?

They waited too long in my opinion, but it is what it is. Their models are calibrated. It's hard to calibrate models for this type of economy. But yes, that argues for rate cut, but it also argues for a weaker Canadian dollar, Denis.

Well, thank you, Stéfane, and thank you everyone for joining us today. We'll see you next month. Goodbye.

Hello everyone and welcome to Economic Impact. Today we are a February Fourteen 2024 and as usual. I am with our Chief Economist, Stéfane Marion. Hello, Stéfane.

Denis, February 14th. Thanks for being my Valentine.

Oh my God. OK, let's start. OK. Today I think we need to talk about the equity market once again because we had new high.

Yeah, it's it's been staggering since last November, and the US Federal Reserve opened the door for potential rate cuts in 2024.

Yeah, new high early in February. We are actually surpassing the previous record that was established at the very end of 2021. So it's been a

it's been an unusually strong performance since November. And it's not across the planet, though. It's more North America and a lot more US.

So, two months into the year almost, you know global markets up 3%, mostly driven by US 4%, Japan up almost 12%. But look at the rest of the world, Denis. I mean the impact of previous rate hikes is starting to impact maybe not the US so far because there's been tremendous fiscal policy or, you know, momentum in the US with the IRA. But elsewhere around the world you can feel that there's, there's slowing growth there. So yes, it's new record, but mainly on the back of the US and Japan. Yeah, good. And one of our favorite, favorite subject inflation. Once again, we had the US number yesterday was a bit surprising. So there you go. The market is up since November because the Fed opened the door for potential rate cuts in 2024. But all of that is very much dependent on what happens on inflation. So expectations or rate cuts may need to be reassessed given the latest number on inflation. Yes, overall inflation is at 3.1% and we're way down from the 9% that was observed in 2022. But core inflation which excludes food and energy is at 3.9%. It's actually accelerating on a month-to-month basis right now. So, I think there will be rate cuts this year to you. But we actually in our current forecast, we pushed them back to the third quarter of this year and the market was expecting not too long ago potential rate cuts as soon as March of this year. So from a stock market perspective, you may need to reassess your expectations because the longer the Fed delays its rate cuts, the more there's a potential for a deleveraging episode in financial markets.

Remember, not that long ago, you know, we were expecting rate cuts late in 2024. We changed our mind because we saw big deceleration inflation. Now we're back to square one almost.

It's hard if you're central bank or to calibrate models incurring contacts. And don't forget any commercial real estate is yet again becoming a concern and for regional banks in the US and under these circumstances, again, the longer the Fed delays its rate cuts, then the more you're likely to see collateral damage and some parts of financial markets. That's why we say they've never been ever before a monetary tightening cycle without one episode of deleveraging, and we have yet to see it.

If we're back in Canada, we'll look at inflation once again. You know, not same number, but same direction, but for different reasons.

Yeah, the bank account, unlike the US hasn't been as aggressive in guiding towards potential rate cuts and for good reason. Unlike the US, the Bank of Canada is struggling to see through shelter cost inflation, which is running at 6%, which is unprecedented at this point in the monetary tightening cycle. It should be coming down, but it's stuck at 6%, Denis.  And the Bank of Canada last week actually acknowledged that yes, we know it's shelter costs. We don't control it, but we can't ignore it. So therefore at this point in time, they're not promising imminent rate cuts. So, in Canada also, I think we push back our rate cut expectations to the second-half of this year.

Yeah. And we thought that the housing affordability was getting in the right direction. But once again, numbers show that no, not exactly. Especially it's the same across Canada, but at different level. It's not good, Denis. So yeah, you're right. Shelter costs inflation reflects the fact that home affordability is deteriorating quite significantly.

You know, in Vancouver or Greater Toronto Area, you know, households have to devote 90 to 100% of median income to purchase a home. Not going to happen, right? It's the worst affordability in in over 2 generations. You got to go back to the 1980s and it's across the board, not so much in Alberta at this point in time, but the rest of the country clearly struggling with and affordability crisis. I would depict it that way.

And once again another in fact landmark working age population surge once again in January which is a huge number. 

So, I can't bring down affordability. People are saying it's going to come down if rates come down, Denis, it can't come down if you're population continues to search because that's higher demand for housing. So we spoke to what happened in 2023, population growth of 1.2 million people were starting the year with 125,000 in a single month, the month of January, Denis. It's a new historical record for Canada on a monthly basis. In the Greater Toronto Area, for example, the largest metropolitan area in Canada, it's 32,000 people per month right now. That's a, that's 25% of Canada's population growth is happening in the Greater Toronto Area, which is putting tremendous pressure on the public finances of the, you know, the fiscal House of municipalities across Canada, but particularly in the Greater Toronto Area. So, I can't bring improve affordability with this type of population search.

And once again it's because rates are still high not to help building permits are going down which is creating more problem.

And Denis, everyone knows you have to calibrate your immigration policy given where rates are and then if rates are high property builders are just not building right now. So, the government says we need more supply, yes but the rate structure is not conducive to more supply. So we have surging population with building permits plummeting across most metropolitan areas. Look at the GTA, Vancouver, Montreal, only Calgary is trending up right now, but if not it's multi year lows. So you have population and multi year high with building permits at a multi year low. So that's not going to improve affordability anytime soon.

No, no, and at the same time we are trapped in what we call a population trap which is an economic kind of subject.

You know, we wrote a piece on that and the idea doesn't come. We didn't invent the term, Denis. It was invented by Robert Solow - Nobel Prize in economy who argued one day that you know you can grow your GDP, your economy through population up to a certain extent. There comes a point that if you don't have enough investment in the country, while your population increase can no longer lead to improving living standards. So the population trap that we're seeing in Canada is historical. It's unprecedented. Normally, it's the preserve of emerging markets with, you know, high natality rates, fertility rates, not the case in Canada, which is written by immigration. So again, we're very much for immigration as long as the government is able to calibrate for where we are in the cycle. Notice on this slide that the US has experienced a brief population trap after the 2008, 2009 financial crisis when banks stopped lending collapse in banking sector, but they rebounded. But look at the extent of the population trap in Canada at this point. Is, what, five? Yeah, and five times greater than us during the great financial crisis. So hard to get out of that. So all I'm saying here is we, we know immigration. We have to welcome people with dignity in this country. And right now, given the capacity, the first 3 to 500 people get access to certain services and the balance all the way up to 1.2 million. While they're not welcome to the country with dignity because we don't have the capital or the services to go along with that.

That's why we have to recalibrate on that front. Because if you don't improve the population trap, the living standards are not going to get better anytime.

Yeah, we need to do it sooner than later. And you just mentioned it's the standard of living is going down in Canada because of all of that.

So this is, this is the concept that what leads the clear indication that you're in a population trap is when you look at your capital labour ratio and then you compare that to your per capita GDP. And right now living standards in Canada have been eroding. They've been at a standstill for almost six years and they've been eroding in six consecutive orders, which is almost unprecedented for the country. So again, it's just a question of recalibrating, given where you are in the cycle. That's why we're advocating for Ottawa to put in place a special committee of experts that could actually advise the government on what the country can absorb in terms of population at any point in time, given where you are in the cycle. I think we have to depoliticize this whole thing and we get, we have to get the overall number of what the country can absorb. Again, it's a question of welcoming people with dignity. If not, we're going to have a reputational risk internationally if we can't welcome foreign talent with dignity. You're very right on that.

Well, once again, it's very interesting. Stéfane. Thank you very much for being with us. And thank you also all of you for watching.

Hopefully we'll see you once again there in the beginning of March.

Thank you.

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