Direct investment is down over 50% since 2015.
Investor confidence in Canada is collapsing.
Statistics Canada data reveals that direct investment in Canada plunged 26% in 2017, and now stands at $33.8 billion.
According to Bloomberg, “Capital flows dropped for a second year, and are down by more than half since 2015. The investment that did take place was from reinvested earnings of existing operations. Net foreign purchases of Canadian businesses turned negative for the first time in a decade, which means that foreign companies sold more Canadian businesses than they bought.”
If this foreign investment exodus was being replaced by a surge of domestic investment, it would be a good thing, as growing domestic investment in Canadian businesses is far better. But that’s not what’s happening.
There is no surge of Canadian investment in our economy, as both foreign firms and Canadian firms (particularly in the energy industry) are pulling back investments and trying to unload what they have.
As Bloomberg notes, the investment collapse “marks a setback for Prime Minister Justin Trudeau’s Liberal government, which has emphasized attracting foreign companies.”
Notably, this collapse in investment makes Canada more reliant on unstable foreign funding, rather than secure investment:
“Unlike portfolio investment, foreign direct investment is considered a stable source of funding that comes with the additional benefits of a transfer of know-how. Instead, an increasing amount of Canada’s funding needs are being met by short-term funds denominated in foreign currencies — which makes the country more vulnerable to a sudden loss of interest from foreign investors.”
And, in a fact that won’t surprise many, the biggest foreign investment into Canada last year came from “Hong Kong’s richest man, Li Ka-Shing.”
This foreign investment collapse is an indictment of Justin Trudeau’s economic policies, which have put carbon taxes, regulations, and virtue-signalling ahead of empowering our economy to succeed.
Just take a look at the chart below to see how Trudeau taking power perfectly coincides with the collapse:
The cost of Trudeau’s failed policies is now reaching into the tens of billions every year, and it’s only getting worse.
Spencer Fernando
Photo – YouTube
