FDI IN CANADA
Foreign direct investment (FDI) is a critical strategic lever for Canada’s economic growth, contributing to innovation and the creation of highly skilled and well-paying employment across the country.
Global investors increasingly seek not simply to invest, but also to establish themselves in Canadian communities.
Canada’s enormous area, plentiful resources, and prosocial principles, together with its excellent quality of life and highly qualified labor force, will make it the destination of choice for foreign direct investment in the new global economy.
FDI FACTS AND FIGURES
With an annual total of $75.5 billion in 2021, Canada’s annual foreign direct investments not only rebounded, but also achieved their highest level in 15 years!
These figures are promising for Canadians because they indicate a crucial economic boost and the development of high-quality employment. They are also a perfect illustration of how locating the finest firms to invest in domestically benefits our communities.
Global corporations spent $75.5 billion in Canada in 2021, the largest yearly total since 2007, and a 41 percent increase above the 10-year average for foreign direct investment (FDI).
The manufacturing industry benefited the most from FDI, surpassing its 10-year average by 46.6% and reaching $19.2 billion. Energy and mining ranked second, surpassing its 10-year average growth rate by 72,9 percent to reach $16.6 billion.
The biggest proportion of FDI by type in 2021 will be reinvested earnings, indicating that corporations are reinjecting their money into Canada and declaring their intention to establish themselves here to support our economy and communities.
In 2021, Invest in Canada directly sponsored international initiatives. Among the leading investor nations were the United States, Switzerland, and the United Kingdom. Last year, Canada drew roughly US$0.72 of FDI for each dollar of GDP created in the Canadian economy, which was greater than the G20 and OECD norms of US$0.38 and US$0.55 respectively.
Supporting the development of innovative and sustainable technologies, practices, and products, FDI may contribute to the expansion of industries that contribute to Canada’s robust economy, from forestry and agriculture to energy and manufacturing.
FDI will assist Canada in introducing innovative solutions to the global market, such as batteries and electric cars, novel plant-based meals, and carbon capture technologies, while simultaneously creating highly skilled employment in Canada.
Entertainment and Media
Batteries and Electric Vehicles
FDI STOCKS by country and industry
Main Investing Countries
2020, in %
Main Invested Sectors
2020, in %
Management of companies and enterprises
Mining and hydrocarbon sector
Finance and insurance
Source: Statistics Canada – Latest available data.
What to consider if you invest in Canada
Advantages for FDI in Canada:
A qualified workforce
A welcoming business environment
Large reserves of gas, oil and ore
A solid banking sector
Unparalleled market access (USMCA) and a strong anchor in international trade
A dynamic economy, with a market of 38 million consumers
Sophisticated infrastructure, as well as a very modern transportation network.
Disadvantages for FDI in Canada:
Strong exposure to the United States’ economy, namely to exports to the US
Sensitivity to international commodity prices and to the government revenues that depend on oil
A drop in productivity in manufacturing industry
A decrease of the active population due to ageing.
Government Measures to Motivate or Restrict FDI Canada offers low business taxes for companies and a very good business climate. Total business tax costs are by far the lowest among the G7 countries.
Companies investing in Canada can benefit from a range of incentives and tax credit programmes:
Scientific Research & Experimental Development
Accelerated Investment Incentive
Strategic Innovation Fund
Global Skills Strategy
Canada’s Pan-Canadian Artificial Intelligence Strategy
Innovation Superclusters Initiative