Foreign Direct Investment
The concept of foreign direct investment is established by the "OECD Benchmark Definition of Foreign Direct Investment, Fourth Edition" (BDM4) as well as by the International Monetary Funds’ "Balance of Payments and International Investment Position Manual, Sixth Edition" (BPM6). Both international standards are harmonized with respect to foreign direct investment. In short, the Organisation for Economic Cooperation and Development defines direct investment as "category of cross-border investment made by a resident in one economy (the direct investor) with the objective of establishing a lasting interest in an enterprise (the direct investment enterprise) that is resident in an economy other than that of the direct investor....the "lasting interest” is evidenced when the direct investor owns at least 10% of the voting power of the direct investment enterprise.”
Statistics Canada's foreign direct investment statistics cover Canadian entities that are engaged in a direct investment relationship. Foreign direct investment measures are compiled with respect to transactions, positions and income with all foreign affiliates. These entities can be either a Canadian direct investor in a foreign direct investment enterprise, giving rise to ‘direct investment assets’ (gross measure) or Canadian ‘direct investment abroad’ (net measure), or a Canadian direct investment enterprise of a foreign direct investor, giving rise to ‘direct investment liabilities’ (gross measure) or ‘foreign direct investment‘ in Canada (net measure).
The international standard for the geographical distribution of foreign direct investment stock and flow data is based on the immediate investing country, which follows the actual flows of funds and corresponding inter-company claims from one economic jurisdiction to another. It is also suggested in BPM6 and BDM4, where possible, to provide ultimate investor data as a supplementary measure, in order to indicate the economy from which the investment originates. The ultimate investor concept takes on increased importance in foreign affiliate statistics.
Statistics Canada produces both annual and quarterly estimates of foreign direct investment. Quarterly estimates are available through Canada's international balance of payments and international investment position, with a disaggregation by type of investment (equity and debt instruments), and limited geographical and industrial detail. Annual estimates of foreign direct investment positions are available approximately four months after the reference year and are more comprehensive in terms of geographic and industrial data than the quarterly estimates.
International investment position, Canadian direct investment abroad and foreign direct investment in Canada, by North American Industry Classification System (NAICS) and region (36100009)