The US and Canada have traditionally invested in large quantities in each other’s countries, but did the Covid-19 pandemic affect this? (Photo by Mert Alper Dervis/Anadolu Agency via Getty Images)

In 2020, the US received 1,696 greenfield FDI projects, while there were 292 projects recorded coming into Canada, according to GlobalData.

The number of projects into the US fell sharply in a Covid-dominated 2020, decreasing by 11% from 2019. During the same period, the number of greenfield FDI projects into Canada fell even further, by 22%.

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US outbound FDI into Canada

US-based companies created 164 projects in Canada in 2020. This represented a 4.7% decrease compared with 2019.

Nominally, US-based companies primarily invested in software and IT services, consumer goods, and communications and media sectors in Canada. Combined, these three sectors accounted for 51% of total US outbound FDI projects destined for Canada.

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Proportionally, Canada received a larger share of US outbound FDI in the beverages (20% of total US outbound FDI in the sector), consumer goods (14%) and metals and minerals (11%) sectors.

Top US-based investors in Canada included Amazon, Hyatt Hotels and Hotel Equities. Combined, these companies accounted for 25% of total project flows.

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In terms of total US outbound FDI projects, Canada ranked as the fourth-largest recipient country in 2020. It was the fifth-largest recipient in 2019.

US-based companies primarily established operations in Ontario. In fact, 54% of projects into Canada by US companies were located there in 2020. Quebec and British Columbia were the next most popular subnational destinations.

Canadian outbound FDI into the US

Canada-based companies created 165 projects in the US in 2020. The number of projects increased by 18.7% compared with 2019.

Business and professional services, software and IT services, and logistics were the top sectors in which Canadian companies invested in the US. Combined, these three sectors accounted for 38% of total Canadian outbound FDI projects destined for the US.

Top Canada-based investors in the US included Caisse de depot et placement du Quebec, Four Seasons Hotels and Resorts, and Royal Bank of Canada. Combined, these companies accounted for 30% of the total number of Canada-headquartered projects established in the US in 2020.

The US ranked as the leading recipient country of Canadian outbound FDI in 2020. It was also the leading recipient in 2019.

Canada-based companies primarily established operations in California. In 2020, 12% of all Canadian outbound projects destined for the US were created in California. Texas and New York were the next most popular subnational destinations.