As global competition for foreign investment continues to heat up, the Canadian government revamped the country’s foreign investment strategy with the launch of Invest Canada.

For a long time an exporting country, Canada’s economy and society are both international and open, especially towards foreign investment. The country is the world’s 11th top destination for greenfield FDI based on capital expenditure from 2003 to 2018, according to greenfield investment monitor fDi Markets.


Canada’s current stock of inward foreign investment stands at about $800bn, and of its 36 million citizens, about 1.9 million work for foreign-controlled multinational enterprises operating in the country. This represents one in eight Canadian jobs, according to Global Affairs Canada.

Playing catch up

Despite attracting substantial foreign investment, the Canadian government only recently established a dedicated investment promotion agency (IPA), Invest in Canada. Most, if not all, G20 countries already have similar organisations, which have become vital tools for the task of attracting foreign investment.

Funded to the tune of C$218m ($170m), Invest in Canada plans to simplify the process for international businesses to enter Canada. The aim is to attract FDI in sectors aligned with the government’s economic growth strategy, such as advanced manufacturing, agri-food, clean technology, digital technology, health sciences and biosciences, and clean resources.

“Our competitors within the OECD or the G20 have really upped their game and developed very focused, targeted and robust platforms to direct more global capital to their countries. Canada has only recently taken the enlightened decision to create a FDI platform, so the competition has been ahead of us and we are going to catch up in a meaningful way,” Ian McKay, chief executive of Invest in Canada, told online news hub TheFutureEconomy.

The Canada Strategic Infrastructure Fund (CSIF) of about C$1.25bn is another update to Canada’s FDI scene. It is administered by the federal government to partner with private sector investors in order to accelerate and create the infrastructure required to receive investment.

Call to action

The move may be timely. In 2017, foreign investment into Canada plummeted to its lowest level since 2010, dropping 26% to $33.8bn, according to Statistics Canada. For the second year running, capital flows dropped – down by more than half since 2015.

Daniel Silverman, executive vice-president of investment attraction at Toronto Global, says there has been a push by the federal government to drive further investment into Canada and to be more focused on promoting Canada internationally.

“We have a challenge globally, but especially in Asia. If the Toronto Region goes to Asia, we are perceived as a small town. So part of it was increasing the brand recognition of Canada as a whole to help each of the municipalities in Canada promote themselves globally. The Toronto Region is not an international brand... People don’t know who we are, where we are, what we are, or the size of the Toronto Region...We’re a very big region representing 20% of Canada’s GDP [with lots to offer]”, he adds.


Blair Patacairk, managing director of Invest Ottawa and president of the Consider Canada City Alliance (CCCA), says: “The movement afoot to attract more FDI is a direct call to action because of [digitalisation and] the new world order; India and China are really coming up from behind and taking a leadership. There really needed to be movement by Canada to make sure that, beyond what we do everyday with the United States, we have good relationships in other critical markets.”

“[There] are a lot of foreign direct investment opportunities that see Canada as a stepping stone into the US. That’s okay as long as they set up in Canada first and branch out.  As the largest bilateral trading agreement in the world, Canada and the US continue to share a privileged relationship due to geographical proximity and similar cultures. This makes for a good business climate”, adds Mr Patacairk.

However, with roughly 55% of Canada’s greenfield FDI originating from the US, the case for diversification is justified, especially in light of the US administration’s protectionist rhetoric. President Donald Trump’s threat to destroy Nafta (among other things) most likely exacerbated Canada’s FDI woes in 2017, along with the country’s energy slump.

On the upside, the trade stand-off was recently resolved with the signing of the US-Mexico-Canada Agreement, which will replace Nafta and provide the US greater access to Canada’s dairy industry, among other conditions.

Collaborative approach

Invest in Canada may well have arrived late to the conventional IPA party. However, for many years, Canada has boasted a rather unique, well-established and highly collaborative network of investment promotion agencies from coast to coast: the CCCA.

“The CCCA unites 13 of Canada’s largest municipal regions to build a sustainable and globally competitive national economy built upon the collective strength of each member's ecosystem…[The CCCA] works with national and international networks of partners to make Canada the preferred location for foreign investment and trade,” says the CCCA’s website.

Mr Patacairk explains how “Canada’s embassy and trade departments around the world at times favour [Canadian cities] jointly visiting their markets, as opposed to one-offs".

"Joint visits give Canada a robustness to our overall value proposition," he says. "Although Canadian cities still have their own FDI strategies, CCCA members work collaboratively in certain markets worldwide. CCCA is fulfilling the alignment of messaging and working with [Canada’s international trade department] on joint missions abroad, and on initiatives with the newly minted Invest in Canada.”

The difference between CCCA and Invest in Canada is that the former is more internally-minded, serving Canadian cities more than foreign investors, whereas the latter concentrates on attracting and assisting prospective and landed investors. “CCCA provides a forum and the infrastructure that is needed to allow its members to share their experience, intelligence, and best practices in attracting FDI,” the CCCA website says.

However, before the launch of Invest in Canada, investors were left to work with the CCCA and Global Affairs Canada (the government’s department of trade), plus other regional organisations – the process was probably more convoluted compared with other one-stop-shop IPAs that businesses might be used to.

“We have so many extraordinary platforms at the municipal level for FDI recruitment. [However], the bigger picture [was] a little too diffused and we need to work with all those partners, and develop a more cohesive brand offering and value proposition to investors about the economic benefits of operating in Canada,” Invest in Canada’s Mr McKay told TheFutureEconomy.

Editor's note: This story was updated from its original form to correct misquotes.