Canada has seen a four-year peak in FDI, with the technology, real estate and aerospace sectors enjoying substantial growth. Zara Fennell reports.

A record $41.9bn of FDI was recorded in Canada in the 12 months to June 2019, according to fDi Markets. Between July 2018 and June 2019, Canada experienced its highest inflow of FDI in four years. Capital expenditure surged from $9.16bn to $41.89bn.

While this increase was partly driven by a $29.8bn joint venture project from Shell Canada, there is evidence that FDI into Canada has been steadily increasing over the past four years. The total number of projects increased from 269 in the 12 months to June 2016 to 350 in the 12 months to June 2019. Across the period, capital investment increased by 31.07%, creating an estimated 72,281 jobs, according to greenfield investment monitor fDi Markets

The most notable sectors include software and IT, which experienced growth of 60.32% to register a record of 101 projects in the 12 months to June 2019 and generated a total capital expenditure of $13.7bn between July 2015 and June 2019; real estate, which had project growth rates of 100% 
 and an estimated capital expenditure increase of 145.37%; and the aerospace sector, which recorded project growth rates of 900% between July 2015 and June 2019, and job growth of 2926.09%. 

The increase in Canada’s software and IT sector has largely been driven by the country’s skilled workforce, with Montréal and Toronto placing as the top two cities in Canada and the US for the quality of its artificial intelligence industry, according to data from fDi Benchmark.

Across the country, Toronto remains the top city for FDI, attracting a record of 105 projects in the 12 months to June 2019, while Montréal also achieved a record high of 55 projects across the same period. Vancouver experienced a 14.81% increase in projects over the four-year period to June 2019, and has remained at the same level for the last two years. 

Comparing the US and Canada across the four years to June 2019, the figures show the US experienced an increase of 6.88% in projects, an increase of 13.34% in jobs and a capital expenditure increase of 24.75%. Meanwhile, Canada experienced an increase of 30.11% in projects, an increase of 41.00% in jobs, and a capital expenditure increase of 357.37%.

The sharp rise in FDI into Canada coincides with the election of US president Donald Trump. Restrictions and tariffs imposed by the Trump government may have increased Canada’s attractiveness as a foreign investment destination.

This article is sourced from fDi Magazine
fDi Magazine
Credit: Zara Fennell

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