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’t the only metric that matters.
Agency data released last week shows foreign direct investment, or FDI, hit $96.8 billion last year, the highest level recorded since 2007.
Prime Minister Mark Carney hailed the investment surge as “good news for Canadians” in a social media post last week.
“More international investment means more of our businesses can scale up faster, creating more high-paying career opportunities for Canadians,” Carney said in a post on X.
TD Bank economist Maria Solovieva cautioned that “just the sheer volume and direction (of investment) may not necessarily say anything specific.”
“That’s why it is important to look at the data on a sectoral basis, what types of transactions they are,” she said.
StatCan said merger and acquisition activity accounted for $43.8 billion of FDI last year, in line with levels seen in 2024. The trade and transportation sector, followed by the company management and manufacturing industries, saw the bulk of FDI gains last year.
The agency said more than half of last year’s foreign investment came from the United States, while Solovieva noted Canada was pulling back on investments south of the border during the tariff dispute.
While Solovieva said diplomatic handshakes abroad can show up in Canada’s economy as foreign direct investment, most of last year’s figures likely reflect groundwork laid by the previous Liberal government under former prime minister Justin Trudeau.
Sizable FDI gains from the United Kingdom in 2025 likely reflect years of efforts to deepen bilateral relations between the nations, Solovieva said.
She said Canada may see more foreign investment if Carney’s global travels in search of trade deals start to bear fruit in future years.
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.
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.
Companies that come to Canada to invest in new production facilities, meanwhile, create new jobs that wouldn’t have existed without the FDI, she said.
“Government needs to be really careful about which FDI they are courting, allowing, hyping,” Tiessen said.
This report by The Canadian Press was first published March 3, 2026.
