They Come, They See, They Expand
This section highlights the unique business advantages of Canada. Each Reason to Invest provides you with a compelling overview and the related facts and figures to help you make solid business decisions.
Foreign Direct Investment
Canadian Two-Way Investment: A Key Driver of Globalization
- Over the past two decades, Canada has witnessed a substantial growth in both inward and outward FDI.
- Canada’s inward FDI stock reached C$416 billion in 2005, a 6.4-fold increase from C$65 billion in 1980.
- As for Canada’s outbound FDI, the expansion of Canadian direct investment abroad (CDIA) has been even more spectacular, rising from C$28 billion in 1980 to $465 billion in 2005, a 16.6-fold increase.
- Since 1997, Canada has been a net exporter of FDI, with outward FDI stock outstripping inward FDI stock each consecutive year.
Canada's Inward and Outward FDI Stock ($Billion)
| Year |
FDI |
CDIA |
| 1992 |
137.918 |
111.691 |
| 1993 |
141.493 |
122.427 |
| 1994 |
154.594 |
146.315 |
| 1995 |
168.167 |
161.237 |
| 1996 |
182.126 |
181.238 |
| 1997 |
194.277 |
218.607 |
| 1998 |
219.389 |
262.909 |
| 1999 |
252.563 |
290.73 |
| 2000 |
319.116 |
356.506 |
| 2001 |
340.429 |
399.253 |
| 2002 |
356.819 |
435.494 |
| 2003 |
364.708 |
411.887 |
| 2004 |
380.951 |
451.438 |
| 2005 |
415.561 |
465.058 |
| Source: Statistics Canada, May 2006 |
U.S. Investment
The United States is Canada’s Largest Source of FDI. In 2005, the U.S. share of foreign direct investment (FDI) in Canada was 64.1%, close to its historical level of 64.2% in 1990.
Geographic Distribution of Inward FDI stock in Canada
2005
| Country
| %
|
| United States |
64.1 |
| United Kingdom |
7.2 |
| France |
6.8 |
| Netherlands |
5.2 |
| Switzerland |
3.1 |
| Japan |
2.6 |
| Others |
11 |
| Source: Statistics Canada, May 2006 |
Growth
- Increasingly more investment goes to knowledge-based industries in high-tech manufacturing such as electronics, communications and energy.
Average Annual Growth Rates of Foreign Direct Investment
by Industry (%) 1990-2005
| Industry |
Average Annual Growth (%) 1990-2005 |
2005 Distribution (%) |
| Electrical & Electronic Products |
13.4 |
6.7 |
| Energy |
12.0 |
19.7 |
| Services & Retailing Industry |
11.3 |
10.1 |
| Communications |
10.6 |
2.0 |
| Finance & Insurance Industry |
10.1 |
21.4 |
| Transportation Equipment |
9.2 |
8.6 |
| OVERALL |
9.0 |
100.0 |
| Food, Beverage & Tobacco |
8.7 |
5.8 |
| Metallic Minerals & Metal Products |
8.5 |
6.4 |
| Machinery & Equipment |
8.0 |
3.7 |
| Chemical Products & Textiles |
8.0 |
9.9 |
| Construction & Related Activities |
6.2 |
2.5 |
| Wood & Paper Industry |
3.6 |
3.2 |
| Source: Statistics Canada, May 2006 |