Foreign investors haven’t given up on Canada — just on our energy sector
Outside of oil and gas, foreign investors haven’t given up on the Canadian economy.
That’s the takeaway from detailed industry data released Wednesday by Statistics Canada that showed the sharp slowdown in foreign capital inflows last year was energy-related.
The stock of foreign direct investment, including debt, in Canada outside oil and gas rose 4.7 per cent to $704 billion in 2017 — the fastest increase in three years. Investment in the oil and gas sector, on the other hand, fell by the largest amount in at least 17 years — down 12.2 per cent to $120 billion.
While falling oil prices have made Canada’s energy industry less attractive, the pick up in other sectors is good news on one front: It suggests worries about the fate of the North American Free Trade Agreement didn’t make Canada’s economy, which led the Group of Seven nations in growth last year, a less appealing place to put money.
Increased foreign direct investment into Canada was led by the finance and insurance industry, which saw the stock of capital rise 8 per cent on the year to $137 billion. Retail sales, management, real estate, and wholesales also recorded gains.
There was a small drop in the stock of manufacturing FDI last year, but the collapse of investment in energy meant the factory sector remains the No. 1 destination for foreign capital.
The total stock of foreign direct investment increased 1.9 per cent to $824 billion, the slowest pace since 2011.