Canada Sees Investment Flight As Economy Slows & Gov Targets Investors

Canada may be in the process of losing its reputation as an investment safe haven. Statistics Canada (Stat Can) released its balance of international payments for Q1 2024, reinforcing preliminary data showing investors are looking for opportunities abroad. It also revealed foreign investors are engaging in their first divestment from the country in 14 years, as the domestic economy heads towards underperforming the global average. 

Foreign Investors Pulled Billions Out of Canada’s Economy 

Canada is no longer the foreign investment darling it once was, as money flees back overseas. Net foreign direct investment into Canada was -$3.4 billion in Q1 2024, meaning investors withdrew more money than they let remain in the country. It was the largest withdrawal going back to at least 2007, when the data set begins. Though a net outflow historically is so rare that only one other quarter (Q4 2020) had a negative print. 

The agency noted foreign investors withdrew a total of $6.8 billion from Canada in Q1, the first investment in 14 years.  

There was one bright spot for foreign investment, with a caveat. Investors abroad managed to sink a record $57.9 billion into Canadian bonds. The catch is most of the private bonds issued were from financial institutions, and denominated in foreign currency. There’s little doubt about the resilience of the country’s financial system, but not a lot of confidence in the currency. 

Canadian Investors Send More Capital Abroad As The Economy Cools  

It’s not just foreign investors—domestic investors are looking abroad for better opportunities too. Canadian direct investment abroad accelerated 72% to $29.8 billion in Q1 2024. Canadian investors also scooped up $37.2 billion in foreign bonds in the quarter, more than the total they picked up in all of 2023. 

The U.S. stock market craze is also picking up steam in Canada. Investors bought $14.1 billion in foreign equities in Q1 2024, the opposite direction of where this trend was at the same time last year. 

Canadians Look To Invest More Abroad

Canadian quarterly foreign investment portfolio in dollars.

Source: Statistics Canada.

Canada is traditionally seen as a safe haven in turbulent times, but that may no longer be the case. Both domestic and international investors are fleeing the country, amidst targeted taxation to slow investment in anything but housing. 

At the same time, the country’s debt heavy households are expected to put a drag on its economy. Even the Bank of Canada (BoC) is now forecasting economic growth will lag the global average. In hindsight, it isn’t surprising to see investors head for the door. It’s more surprising that it isn’t happening at an even larger scale.



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  • Reply
    Micheal G 5 days ago

    Thanks Trudeau, you’ve managed to destroy this country in your 8 years. It’s going to take decades to fix your mess.

  • Reply
    Robert Angus 5 days ago

    To quote jT at the time, “I don’t really think about capital, I think about making Canadians happy”.
    The consequences are going to be horrible for the Canadian economy. Not only is capital fleeing the country, so are professionals. Canadians escaping to the US are up 70% last year, and next year is going to be worse once this tax grab takes hold.
    It won’t be only 0.13%. It will be all Canadians.

  • Reply
    [email protected] 5 days ago

    It is over bagholders
    Next time use your brains
    Stop ripping off immigrants and young people.

  • Reply
    Dick Harper 3 days ago

    That’s what happens when you have clowns for a PM and finance minister that would bankrupt a Lemonade stand.

  • Reply
    Nate 2 days ago

    A fax machine could run this country better. You have no idea how it feels to watch your home become unlivable before your eyes due to the utter incompetence, greed and weak mindedness of our leaders. There are no words that can express the pit in my chest, and how much I want to be able to have what my grandparents had. 4 kids, and a house on one household income should be a reality for all Canadians. Not just the really wealthy. I wish these uncaring individuals would be held accountable for the devastating decline in quality of life among Canadians

  • Reply
    [email protected] 22 hours ago


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