Canada's international investment position, fourth quarter 2025
Released: 2026-03-13
$1,801.1 billion
Fourth quarter 2025
Canada's net foreign asset position, the difference between its international financial assets and international liabilities, decreased by $110.0 billion to $1,801.1 billion at the end of the fourth quarter of 2025, more than offsetting the increase of $107.8 billion recorded in the previous quarter. Overall, the decrease in the fourth quarter came from a sizable downward revaluation from fluctuations in exchange rates and, to a lesser extent, the downward revaluation from market price changes.
Chart 1
Canada's net international investment position
The revaluation effect from fluctuations in exchange rates (-$83.4 billion) led the overall decline in Canada's net foreign asset position in the fourth quarter. Over the quarter, the Canadian dollar appreciated against the US dollar (+1.6%), the euro (+1.5%), the British pound (+1.5%), and the Japanese yen (+7.2%), lowering the value of assets and liabilities denominated in these currencies once converted into Canadian dollars. At the end of the fourth quarter, 96.9% of Canada's international assets were denominated in foreign currencies (66.4% in US dollars) compared with 36.7% of its international liabilities (26.5% in US dollars). This made Canada's assets more sensitive to exchange rate fluctuations than its liabilities.
Market price fluctuations resulted in a $46.9 billion reduction of Canada's net foreign asset position in the fourth quarter. The decline mainly reflected the weaker performance of foreign stock markets relative to the Canadian stock market, which increased the value of Canada's international liabilities in equity instruments by more than its international assets. The Canadian stock market (+5.6%) increased by more than the US (+2.3%) and the European (+4.7%) stock markets in the fourth quarter, but less than the UK (+6.0%) and Japanese (+12.0%) markets. At the end of the fourth quarter of 2025, 69.2% of Canada's international assets and 48.2% of its international liabilities were held in the form of equities.
On a geographical basis, Canada's net foreign asset position with the United States was down by $207.4 billion to $1,460.4 billion at the end of the fourth quarter, the lowest level since the first quarter of 2024. Canada's net asset position with countries other than the United States showed a different trend, increasing by $97.4 billion to reach $340.7 billion at the end of 2025 on the strength of market prices.
Chart 2
Contributors to the change in the net international investment position
Greater increase of Canada's international liabilities than its international assets
Canada's international liabilities amounted to $9,601.5 billion at the end of the fourth quarter, an increase of $300.9 billion from the previous quarter. This increase was primarily the result of the upward revaluation due to fluctuations in market prices (+$189.4 billion) and foreign borrowing activity (+$166.1 billion). The downward revaluation effect from fluctuations in exchange rates (-$48.7 billion) moderated the increase in Canada's international liabilities.
Increasing less than liabilities, Canada's international assets were up by $190.9 billion to $11,402.6 billion at the end of the fourth quarter. Acquisitions of foreign assets (+$168.3 billion) combined with the upward revaluation attributable to market price changes (+$142.5 billion) contributed to the growth. Revaluation from exchange rate movements (-$132.1 billion) moderated the increase. By category of investment, Canadian portfolio investment abroad increased by $109.4 billion to reach $4,727.9 billion at the end of the fourth quarter, surpassing Canadian direct investment abroad for the first time since the first quarter of 2019. Since the end of 2019, Canadian portfolio investment abroad has grown by $2,261.0 billion, nearly doubling its pre-COVID-19 pandemic level, an increase that is strongly correlated with the growth of the US stock market.
Chart 3
Canada's international assets and liabilities
Chart 4
Canada's net international investment position, by region
Canada's gross external debt increases
At the end of 2025, Canada's gross external debt, or the value of Canadian debt instruments held by foreign investors, reached $4,770.4 billion, an increase of $78.4 billion over the course of the fourth quarter. Canada's gross external debt amounted to 146.3% of the gross domestic product at the end of 2025, the highest level since the second quarter of 2020.
On a sector basis, the growth in the fourth quarter of 2025 largely originated from the financial sector, led by deposit-taking corporations. The gross external debt of the financial sector stood at $2,831.6 billion and represented the highest proportion of Canada's gross external debt at the end of 2025. Meanwhile, the gross external debt of the government sector reached $920.7 billion, increasing by $16.2 billion in the fourth quarter, the ninth consecutive quarterly increase.
Chart 5
Canada's gross external debt as a percentage of gross domestic product
Canada's net foreign asset position falls in 2025
Canada's net foreign asset position decreased by $213.3 billion in 2025, following an increase of $467.9 billion in 2024. Canada's international liabilities increase by $1,186.0 billion in 2025, while its international assets grew by $972.7 billion.
In the context of an increasing current account deficit in 2025, financial transactions increased liabilities (+$383.1 billion) by more than assets (+$361.5 billion). In addition, the overall revaluation effect, including exchange rate and market price changes, had a greater impact on liabilities (+$831.2 billion) than assets (+$621.7 billion).
In 2025, the Canadian dollar gained 5.0% on the US dollar. Since a greater proportion of international assets than international liabilities are denominated in US dollars, this made exchange rate fluctuations impact Canada's international assets (-$273.4 billion) more than its international liabilities (-$87.4 billion).
Although global stock markets recorded considerable gains in 2025, revaluations due to market price changes had a small negative impact (-$23.5 billion) on Canada's net international investment position. This contrasted with strong cumulative gains recorded in 2023 and 2024 (+$740.8 billion for both years combined). The Canadian stock market saw greater gains (+28.3%) than the US (+16.4%) and European (+18.3%) stock markets in 2025, resulting in a greater increase in the value of Canadian equities held by non-residents, than foreign equities held by Canadian residents.
Note to readers
Definitions
The international investment position is the value and composition of Canada's assets and liabilities to the rest of the world.
Canada's net international investment position is the difference between Canada's assets and liabilities to the rest of the world. An excess of international liabilities over international assets can be referred to as Canada's net foreign debt. An excess of international assets over international liabilities can be referred to as Canada's net foreign assets.
Foreign direct investment is presented on an asset-liability principle basis (that is, a gross basis) in the international investment position. Foreign direct investment can also be presented on a directional principle basis (that is, a net basis), as shown in supplementary foreign direct investment tables 36-10-0008-01, 36-10-0009-01 and 36-10-0659-01. The difference between the two foreign direct investment conceptual presentations resides in the classification of reverse investment, such as (1) Canadian affiliates' claims on foreign parents and (2) Canadian parents' liabilities to foreign affiliates. Under the asset-liability presentation, (1) is classified as an asset and included in direct investment assets, and (2) is classified as a liability and included in direct investment liabilities.
Next release
International investment position data for the first quarter of 2026 will be released on June 11.
Products
The International trade statistics portal is available on the Statistics Canada website.
The updated Canada and the World Statistics Hub (13-609-X) is available online. This product illustrates the nature and extent of Canada's economic and financial relationship with the world using interactive charts and tables. It provides easy access to information on trade, investment, employment and travel between Canada and a number of countries, including the United States, Mexico, China, Japan, Belgium, Italy, the Netherlands and Spain.
The Canada's international trade and investment country fact sheet (71-607-X) is also available.
The Methodological Guide: Canadian System of Macroeconomic Accounts (13-607-X) is available.
The User Guide: Canadian System of Macroeconomic Accounts (13-606-G) is also available.
Contact information
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