Foreign Investment in Canada Reaches Highest Level Since 2007
Foreign direct investment into Canada experienced a significant surge in 2025, reaching its strongest level in 18 years. According to data released by Statistics Canada, net investment into the country exceeded outflows by $17.4 billion, marking a dramatic reversal from the $49.3 billion deficit recorded in 2022.
Quarterly and Annual Investment Figures
In the fourth quarter of 2025 alone, foreign direct investment totaled $25.1 billion, contributing to an annual sum of $96.8 billion. This represents the highest yearly inflow since 2007, when Canada last saw such robust foreign investment activity.
The quarterly figures showed substantial growth from the revised $17.5 billion recorded in the third quarter. This upward trend indicates strengthening confidence in Canada's economic prospects among international investors.
Drivers of Investment Growth
Mergers and acquisitions emerged as the primary catalyst for the investment surge, with most activity originating from the United States. Major transactions involving companies such as Nova Chemicals, GFL Environmental, and Vancouver-based Sandstorm Gold Ltd. significantly contributed to the overall investment flows.
Fourth-quarter investment was particularly concentrated in several key sectors:
- Trade and transportation
- Manufacturing industries
- Management of companies and enterprises
Current Account and Outward Investment
Statistics Canada also reported that the country's current account deficit narrowed substantially to $0.71 billion in the fourth quarter, down from $5.27 billion in the previous period. This improvement suggests a healthier balance in Canada's international transactions.
Meanwhile, Canadian investment abroad totaled $13.5 billion in the fourth quarter. On an annual basis, these outflows reached $79 billion, representing the weakest level since 2020. This contrast between strong inward investment and relatively weaker outward flows contributed to the overall $17.4 billion net surplus.
Economic Implications and Context
The reversal from 2022's significant investment deficit to 2025's substantial surplus indicates a notable shift in Canada's economic attractiveness to foreign investors. This trend suggests growing international confidence in Canada's economic stability and growth potential.
The data highlights Canada's strengthening position in the global investment landscape, particularly as a destination for American capital seeking opportunities in North American markets. The concentration of investment in strategic sectors like manufacturing and transportation suggests foreign investors are targeting areas with strong growth potential within the Canadian economy.
This investment surge comes at a time when global economic conditions remain uncertain, making Canada's ability to attract substantial foreign capital particularly noteworthy. The figures demonstrate the country's competitive advantages in attracting international investment despite broader economic challenges.
