Jack Mintz: Canada has lost $225 billion in foreign investment since 2016

financialpost.com:

According to the OECD, Canada was the third largest recipient of foreign direct investment (FDI) inflows in the first three quarters of 2023 (at US$42 billion), behind only the United States and Brazil. Does that mean Canada is doing well attracting capital, as the federal government has argued? Not really. Not if you consider outflows, too.

Canada has always relied heavily on FDI inflows to grow our economy. At times, we have been uneasy about foreign takeovers of major Canadian companies. But we have benefited from the new technology, management and jobs FDI usually brings. The highest inflow in the past decade and a half (US$69.4 billion) was in 2014 and it was more than any other country received that year except the U.S. and China. The worst year was 2017 when we received only US$22.8 billion and placed 17th of 45 countries. (Note that these numbers are not inflation-adjusted.)

FDI numbers jump around for good reason. Statistical agencies add up the equity and debt used by non-residents to buy Canadian assets and also include the reinvested profits of foreign-owned companies operating here (exchange rate impacts on earnings are excluded). So the numbers include lumpy greenfield investments in newly constructed plants that may take several years to build. And a big acquisition in one year may make the following year’s numbers look low by comparison.

Foreign investment can be measured as an inflow (acquisitions net of dispositions coming into Canada) or an outflow (Canadian money invested elsewhere). Net FDI — let’s call it the FDI balance — is inflows minus outflows. In the first three quarters of 2023, Canada did attract US$42 billion of inflows, which is about 4.5 per cent of GDP. But Canadians put their money