Questions Linger About Foreign Investment in Canada Despite Freeland’s Approval: Analysis

Finance Minister Chrystia Freeland recently praised this year’s foreign direct investment numbers in Canada. However, concerns remain as business investment and productivity in the country are on the decline. While Ottawa plans to attract foreign capital, business and regulatory environments are considered unsupportive of investment.

Freeland highlighted Canada’s success in attracting foreign direct investment during the first half of the year, stating that it outpaced investment per capita by our G7 allies. She mentioned this at the government’s fall economic statement on Nov. 21.

Questioning the validity of these claims, Jack Mintz from the University of Calgary’s School of Public Policy expressed concerns about the accuracy of these statements given the longer-term decline in private sector investment and productivity. He also pointed out the lack of discussion around per capita GDP in the fiscal update.

In addition, concerns were raised about the impact of one major event skewing the foreign direct investment statistics cited by Statistics Canada. This raises questions about the actual strength of the FDI Canada receives as a percentage of its GDP, especially in the context of high inflation.

The practice of attracting foreign investment to supplement domestic investments is being questioned, with the Organisation for Economic Co-operation and Development (OECD) urging Canada to reconsider its restrictions on foreign direct investment. These restrictions apply specifically to industries like telecommunications and aviation.

In the meantime, analysis indicates that Canada’s weak economic growth is linked to poor business investment and exports, both of which have declined since 2015. This, in addition to the decline in productivity, raises challenges of attracting sufficient foreign investment.



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