Clark made his comments to convocating students in London, Ont., while receiving an honorary doctor of laws degree on Tuesday from Western University.
He said politicians have failed to reform tax systems, adjust entitlement programs and invest in education and infrastructure because these policies would reduce benefits to certain interest groups.
And Clark said he feels society as a whole has failed to respond swiftly to climate change.
"With both cases we have a failure in leadership, and we take soft options knowing that in the future we will face ever harder options," Clark said.
Clark also reflected on his career, which includes more than a decade at the helm of TD Bank Group (TSX:TD), years that marked a period of significant growth for the bank.
He will be 67 when he retires on Nov. 1, 2014.
Clark's successor to the chief executive role when he retires will be Bharat Masrani, 56, who has headed TD's U.S. personal and commercial banking group since 2006.
Masrani will move back to Canada to become the TD's chief operating officer starting July 1 and then CEO when Clark retires.
Clark closed his remarks by encouraging graduating students to follow career paths they enjoy and not to overlook the importance of key relationships.
"In the end what matters most is that your partner is still the love of your life, that your kids and grandkids come home regularly to visit ... that you have good friends, people you can trust and count on, and that the big decisions you made in life were based on the right things," said Clark.
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