Foreign direct investment, 2025
Released: 2026-04-29
The stock of foreign direct investment in Canada increased by $103.0 billion (+6.9%) to reach $1,600.5 billion by the end of 2025. Meanwhile, the stock of Canadian direct investment abroad rose by $65.9 billion (+2.8%) to reach $2,428.9 billion by the end of the year, the lowest increase in value since 2020. As a result, Canada's net direct investment position with the rest of the world—the difference between the stock of outward and inward direct investment—dropped for the first time since 2012, down by $37.1 billion to $828.4 billion by the end of 2025.
Chart 1
Canada's foreign direct investment position
Foreign direct investment in Canada up in both services- and goods-producing industries
The growth in the stock of foreign direct investment in Canada (+6.9%) at the end of 2025 outpaced that of Canadian direct investment abroad (+2.8%) for the first time since 2022. In 2025, merger and acquisition transactions contributed the most to the increase in the inward direct investment position over the year. Earnings reinvested by foreign investors in their existing Canadian affiliates also contributed. These earnings refer to the portion of profits not distributed to the direct investors in the form of dividends.
The stock of foreign direct investment in services-producing industries grew $76.2 billion (+7.2%) to $1,129.7 billion by the end of 2025. The management of companies and enterprises (+$19.5 billion) and the wholesale trade (+$15.0 billion) sectors were the main contributors to the increase. The management of companies and enterprises sector—often large corporate groups that are recipients of foreign direct investment and involved in a variety of activities in the country—continued to account for the largest share of the total foreign direct investment position in Canada.
Foreign direct investment in goods-producing industries increased by $26.8 billion (+6.0%) to reach $470.8 billion at the end of 2025. The manufacturing (+$14.0 billion) and the mining, oil and gas (+$11.5 billion) sectors led the growth, with increases originating mostly from earnings reinvested by both US and non-US direct investors in their existing Canadian affiliates.
Overall, direct investors from the United States increased their holdings in Canada by $53.7 billion to $737.3 billion at the end of 2025. This represented 46.1% of all foreign direct investment stock in Canada, the highest level since 2018. Holdings from Europe were up by $32.8 billion to $529.8 billion at the end of 2025, representing 33.1% of total inward direct investment. Lastly, investment from Asia/Oceania increased by $9.8 billion to reach $202.4 billion.
Canadian direct investment abroad increases at a slower pace
The stock of Canadian direct investment abroad grew by 2.8% year over year in 2025, the smallest percentage increase since 2010. The downward revaluation of the outward position due to a generally stronger Canadian dollar, combined with a decline in merger and acquisition activities, particularly in the United States, dampened the increase in 2025.
On a geographical basis, Canadian direct investment in the United States was down slightly (-$9.2 billion) to $1,203.4 billion by the end of 2025 and represented almost half (49.5%) of Canada's outward direct investment position. Conversely, Canadian holdings in Europe rose $39.8 billion to $513.6 billion, representing 21.1% of the total outward direct investment position. Direct investment holdings stood at $340.6 billion in the Caribbean, $175.5 billion in Asia/Oceania, and $111.2 billion in South and Central America.
The stock of Canadian direct investment abroad in the finance and insurance sector increased by much less in 2025 (+$16.4 billion) than in the previous year (+$97.6 billion), reaching $845.1 billion by the end of 2025. Nonetheless, this sector still posted the greatest increase in 2025 and represented more than one-third (34.8%) of the total stock of Canadian direct investment abroad. Meanwhile, the management of companies and enterprises (+$12.6 billion), information and cultural industries (+$10.3 billion) and manufacturing (+$10.1 billion) sectors also saw increases.
Foreign direct investment in Canada on an ultimate investor country basis
The standard presentation of foreign direct investment is on an immediate investor country basis, which refers to the last country through which the investment transited before entering the domestic economy. However, foreign direct investment can also be measured on an ultimate investor country basis, by looking beyond the immediate investing country to show the country that ultimately controls an investment.
The stock of direct investment in Canada from Europe was less when measured on an ultimate investor country basis ($367.2 billion) than on an immediate basis ($529.8 billion) in 2025. The Netherlands and Luxembourg were the main countries showing a much lower position in Canada on an ultimate investor basis than on an immediate investor basis. On the other hand, European countries like Germany, France and Ireland were showing a different pattern, with their stock of investment being higher on an ultimate investor basis than on an immediate investor basis. Outside Europe, this was also the case for the United States and China.
Chart 2
Foreign direct investment in Canada by select ultimate and immediate investor country, 2025
Measuring Canadian direct investment abroad on an ultimate investor country basis identifies the country that ultimately controls the investment abroad. In 2025, 91.1% of Canada's direct investment abroad was ultimately controlled by Canadian investors. Investors from over 30 countries ultimately controlled the remaining share, and among these, the United States was the most important contributor.
Note to readers
This is the annual release of detailed foreign direct investment position data at book value. This release contains country and industry details that are drawn from annual surveys and administrative sources. This detailed information is not available at the time of quarterly international investment position releases. However, aggregates of direct investment positions, both at book and market values, are available as part of the quarterly international investment position release.
Year-end position data for 2025 are projected using the latest benchmark survey data of 2024 and flows collected from the 2025 quarterly surveys. In addition, outstanding positions denominated in foreign currencies are re-evaluated to account for changes in exchange rates. These estimates will be revised in 2026 with the integration of benchmark survey and administrative data for the reference year 2025 and will fully reflect the change in the stock of foreign direct investment from one year to the next, including volume changes such as debt or equity write-offs.
Direct investment is a component of the international investment position that refers to the investment of an entity in one country (the direct investor) obtaining a lasting interest in an entity in another country (the direct investment enterprise). The lasting interest implies the existence of a long-term relationship between the direct investor and the direct investment enterprise and a significant degree of influence by the direct investor on the management of the direct investment enterprise.
In practice, direct investment is deemed to occur when a direct investor owns at least 10% of the voting equity in a direct investment enterprise. This release presents the cumulative year-end positions for direct investment, measured as the total value of equity and the net value of debt instruments between direct investors and their direct investment enterprises.
Foreign direct investment by country and by industry
Following international standards, the main measure of direct investment is based on the country of residence of the direct investor (immediate parent company) for foreign direct investment in Canada and on the country of residence of the direct investment enterprise (the immediate subsidiary) for Canadian direct investment abroad. This implies that direct investment is largely attributed to the first investor or investee country, rather than the ultimate investor or investee country. Direct investment data on an immediate investor basis are available in tables 36-10-0008-01, 36-10-0009-01, 36-10-0657-01 and 36-10-0659-01.
Foreign direct investment by ultimate investor
A supplementary series on foreign direct investment by ultimate investor is available in table 36-10-0433-01. This series differs from the standard presentation of foreign direct investment, which is based on the country of residence of the immediate direct investor, by showing the country of the investor that ultimately controls the investment. Because foreign direct investment may be channelled through holding companies or other legal entities in intermediate countries, the measurement of foreign direct investment on an ultimate investor basis can result in substantial changes in the distribution of positions by country when compared with foreign direct investment measured on an immediate investor basis.
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