Foreign direct investment (FDI) in Canada totalled C$18.2bn between July and September 2025, as against C$29.9bn in the third quarter of 2024 (Q3 2024), according to the latest data on Canada FDI trends from Statistics Canada.
Net investment inflows in Q3 2025 were down from C$21.9bn in Q2 2025.
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Year-to-date, FDI stands at C$72.4bn.
The FDI in this quarter was at its lowest level since Q2 2024, when it reached C$42.8bn.
Earnings reinvested in Canadian affiliates by their foreign parent companies (+C$9.6bn), along with mergers and acquisition transactions (+C$5.4bn), were the primary drivers of activity in Q3 2025.
By sector, the largest investments were directed toward trade and transportation, finance and insurance, and manufacturing.
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By GlobalDataGeographically, two-thirds of all FDI in Canada during Q3 came from the US and UK.
The data also indicated that Canadian investment abroad stood at C$25.1bn, resulting in a second consecutive period where more net direct investment dollars left Canada than entered.
Over the past four quarters, FDI totalled C$96.6bn, well above the ten-year average of C$61.9bn.
Canada’s sluggish business investment remains a significant concern for policymakers. The Bank of Canada has identified insufficient capital spending as a major factor behind the country’s lacklustre productivity growth, reported Bloomberg.
To address this issue, Prime Minister Mark Carney’s inaugural budget, unveiled earlier this month, introduced measures designed to stimulate C$500bn in investment over the next five years.
Among these initiatives are enhanced tax deductions, providing more favourable treatment for companies investing in machinery, equipment and new technologies.
Statistics Canada also reported that Canada’s current account deficit shrank to C$9.7bn in Q3, down from a revised C$21.6bn in the previous quarter.
This was primarily driven by a smaller goods trade deficit as exports rose while imports declined. Additionally, increased investment income and a stronger trade in services further contributed to the narrowing of the current account deficit.
During his recent visit to the United Arab Emirates (UAE), Prime Minister Mark Carney secured the equivalent of C$70bn in investment from the UAE.
The funding is set to target energy, AI logistics, mining and other strategic industries.
The prime minister also reached an agreement with Alberta’s premier for the rollback of some climate regulations to encourage investment in energy production, while supporting construction of a new oil pipeline to the west coast.
