OTTAWA \u2014 Statistics Canada says the flow of foreign direct investment into the economy came close to a two-decade high last year, while economists caution the volume of capital entering Canada isn\u2019t the only metric that matters.<\/p>\n
Agency data released last week shows foreign direct investment, or FDI, hit $96.8 billion last year, up about $10 billion from 2024 and the highest level recorded since 2007.<\/p>\n
Prime Minister Mark Carney hailed the investment surge as \u201cgood news for Canadians\u201d in a social media post last week.<\/p>\n
\u201cMore international investment means more of our businesses can scale up faster, creating more high-paying career opportunities for Canadians,\u201d Carney said in a post on X.<\/p>\n
TD Bank economist Maria Solovieva cautioned that \u201cjust the sheer volume and direction (of investment) may not necessarily say anything specific.\u201d<\/p>\n
\u201cThat\u2019s why it is important to look at the data on a sectoral basis, what types of transactions they are,\u201d she added.<\/p>\n
StatCan said merger and acquisition activity \u2014 which businesses typically refer to as M&A \u2014 accounted for $43.8 billion of FDI last year, in line with levels in 2024. The trade and transportation sector, followed by the company management and manufacturing industries, saw the bulk of FDI gains last year.<\/p>\n
The agency said more than half of last year\u2019s foreign investment came from the United States, while Solovieva noted Canada was pulling back on investments south of the border during the tariff dispute.<\/p>\n
For most of the year, Solovieva said, investment was slow both ways between Canada and the United States as firms hit pause on those decisions while the trade war unfolded. A surge in M&A activity from the United States in the fourth quarter brought U.S. FDI levels back to typical levels for the year, she said.<\/p>\n
Canadian direct investment abroad slowed to $79.4 billion in 2025, down from $123 billion the previous year and the lowest level since 2020.<\/p>\n
Diplomatic handshakes abroad can show up in Canada\u2019s economy as foreign direct investment, Solovieva said, but most of last year\u2019s figures likely reflect groundwork laid by the previous Liberal government under former prime minister Justin Trudeau.<\/p>\n
Sizable FDI gains from the United Kingdom in 2025 likely reflect years of efforts to deepen bilateral relations between the nations, Solovieva said.<\/p>\n
She said Canada may see more foreign investment if Carney\u2019s global travels in search of trade deals start to bear fruit in future years.<\/p>\n
Kaylie Tiessen, chief economist at the Canadian SHIELD Institute think tank, said foreign direct investment levels can signal to investors that Canada is a safe and attractive destination to build a business.<\/p>\n
But she also warned that not all FDI is created equal and global firms buying up Canadian companies and extracting revenues do nothing to make the economy more resilient.<\/p>\n
Companies that come to Canada to invest in new production facilities, meanwhile, create new jobs that wouldn\u2019t have existed without the FDI, she said.<\/p>\n
\u201cGovernment needs to be really careful about which FDI they are courting, allowing, hyping,\u201d Tiessen said.<\/p>\n
Solovieva said global mining giant Rio Tinto closing a deal that gave it a majority stake in a Quebec lithium mine last year is a good example of the trade-offs Canada can see from FDI.<\/p>\n
While building out the mine can help to develop Canada\u2019s critical minerals sector and boost exports, Solovieva said, much of the revenue from those resources will also flow outside the country to Rio Tinto\u2019s bases in the U.K. or Australia.<\/p>\n
She said that in cases like Rio Tinto\u2019s where there\u2019s a long-term investment in place, FDI often helps to build out Canada\u2019s overall export capacity and ends up a net positive for the economy.<\/p>\n
Tiessen said the critical matter in her view is where the decisions get made after an FDI deal. If a company\u2019s head office leaves Canada after a merger or acquisition, higher paying or more complex jobs could be shipped out as well.<\/p>\n
She said that when decisions aren\u2019t made locally, that can also hurt domestic suppliers. A company based out of southwest Ontario will be more likely to head down the road for a supplier than a foreign firm that already has its global supply chain firmly entrenched, for example.<\/p>\n
Tiessen said the thing \u201cthat we\u2019re worried about shipping away is control.\u201d<\/p>\n
This report by The Canadian Press was first published March 3, 2026.<\/p>\n
Craig Lord, The Canadian Press<\/p>\n","protected":false},"excerpt":{"rendered":"OTTAWA \u2014 Statistics Canada says the flow of foreign direct investment into the economy came close to a…\n","protected":false},"author":2,"featured_media":512888,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[45,49,48,46,47],"class_list":["post-512887","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-business","tag-ca","tag-canada","tag-economy","tag-national"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/512887","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/comments?post=512887"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/512887\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media\/512888"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media?parent=512887"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/categories?post=512887"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/tags?post=512887"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}