Islamabad, Nov 30: Foreign direct investment (FDI) into Canada remained stable in the third quarter, signaling those businesses continued to commit capital to the country despite growing uncertainty ahead of the US election.
Statistics Canada reported from Ottawa on Thursday that FDI reached C$27.1 billion ($19.3 billion) between July and September, largely fueled by mergers, acquisitions, and manufacturing investments. This figure represents a decline from the record C$41.6 billion in the second quarter, driven by investments in manufacturing, energy, and mining.
The first quarter had seen a dip in FDI due to Royal Bank of Canada’s acquisition of HSBC Holdings Plc’s Canadian division. Over the past year, foreign investment totaled C$58.4 billion, slightly exceeding the decade’s historical average.
The report offers an optimistic outlook for Canadian investment flows, though Donald Trump’s election introduces new uncertainties. His proposed 25% tariffs on Canada and lower US taxes raise concerns about Canada’s attractiveness for foreign capital.
Shelly Kaushik, a Bank of Montreal economist, emphasized the risks tied to the interconnected investment relationship between the US and Canada, noting that the US remains the largest source and destination for Canadian foreign investment. “This highlights the cross-border vulnerability to trade protectionism,” she added.
The Bank of Canada’s recent business outlook survey identified economic growth, elections in both countries, cost pressures, tax policies, and regulations as key factors contributing to uncertainty during the third quarter.
