Canada’s Net Direct Investment Position With the Rest of the World at Highest Level Ever Recorded
New data released this week by Statistics Canada reveals that, in 2023, foreign direct investment in Canada increased by $52.4 billion dollars.
This, however, was eclipsed by the outflows of Canadian direct investing abroad, which rose by $138 billion dollars.
The spread between the two, known as the net direct investment position has expanded over the last 15 years and now sits at the highest level recorded.
In fact, Canada’s net direct investment position with the rest of the world is up by $86.4B dollars, and now totals $811.0 billion.
This means that Canadians now have $811 billion dollars more invested in other countries than their foreign counterparts have invested in Canada.
This highlights a troubling, multi-decade, trend where Canadians are increasingly choosing to invest in foreign markets, and foreign investors are not investing in Canada in kind.
The Global Trend of Investing in Canada From 1989 Until 2009 is Over, And It Doesn’t Seem to be Coming Back
Between 1989 and 2009, investment flow into Canada, and investment flow out of Canada were, for the most part, on equal footing. (chart above)
In fact, pre-1991, there was an investment flow surplus into Canada.
Since then, the trend has largely shifted — money is now leaving Canada in search of greener pastures abroad.
Investment Deficit Reaches All-Time High at 59%
Not only are investment dollars shunning Canada, the investment gap is actually widening.
In 2014, the gap between Canadian money being invested abroad and foreign money invested in Canada was only $100B — an investment deficit of 13%.
Today, the gap that has swelled to $811B, representing an investment deficit of 59%.
Canadians have $2.17 trillion dollars deployed in foreign markets, and foreign investors only have $1.36 trillion dollars invested in Canada.
Where are Canadians Investing Their Money?
In 2023, Canadians chose to invest primarily in the United States.
In fact, Canadian investments in the US were up $63.7 billion to $1,078.1 billion. The USA remains the top choice for Canadian direct investment abroad, accounting for 49.7% of all foreign investments.
