DIRECT INVESTMENT BETWEEN CANADA AND THE WORLD

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1 DIRECT INVESTMENT BETWEEN CANADA AND THE WORLD NOTES The Library of Parliament s Trade and Investment series provides information on Canada s trade and investment relationship with the world and with selected countries. It also describes the trade relationship of each of Canada s 10 provinces and three territories with the world. In addition, it presents Canada s merchandise trade relationship with each of the United States 50 states. All figures were prepared using Statistics Canada data available in summer 2017, with three exceptions: Share of Global Investment Stocks, Stock of Outward Direct Investment as a Share of Gross Domestic Product and Stock of Inward Direct Investment as a Share of Gross Domestic Product. Those figures were prepared using data from the United Nations Conference on Trade and Development. In this profile, the data from the United Nations Conference on Trade Development report foreign direct investment on a market-value basis for Canada, and on a market-value basis and/or a book-value basis for other countries. For Canada, data on a book-value basis are available prior to 2000, but they have not been used in this profile. To see the data tables used to generate the figures, view the HTML version of this profile at Trade and Investment Series The foreign direct investment and foreign affiliate sales data are balance of payments based. Numbers in this profile have been rounded. Definitions appear at the end of this profile. All dollar amounts are in Canadian dollars unless otherwise noted. Michaël Lambert-Racine Economics, Resources and International Affairs Division Parliamentary Information and Research Service Publication No E 18 September 2017

2 CANADA S FOREIGN DIRECT INVESTMENT WITH THE WORLD Stock of Canadian direct investment abroad in 2016: $1.0 trillion, a 1.4% increase from 2015 Stock of foreign direct investment in Canada in 2016: $825.7 billion, a 4.7% increase from 2015 Profits generated by Canadian-held assets abroad in 2016: $45.9 billion, a 0.9% decrease from 2015 Profits generated by foreign-held assets in Canada in 2016: $37.3 billion, a 3.3% decrease from 2015 Share of global foreign direct investment stocks that were of Canadian origin in 2015: 4.3%, a decrease from 4.5% in 2014 Share of global foreign direct investment stocks that were located in Canada in 2015: 3.0%, a decrease from 3.8% in 2014 LIBRARY OF PARLIAMENT 2 PUBLICATION NO E

3 Canada s stock of direct investment abroad as a share of Canadian gross domestic product (GDP) in 2015: 68.3%, an increase from 62.8% in 2014 Global stock of outward foreign direct investment as a share of global GDP in 2015: 34.9%, an increase from 33.0% in 2014 Stock of foreign direct investment in Canada as a share of Canadian GDP in 2015: 47.9%, a decrease from 53.5% in 2014 Global stock of inward foreign direct investment as a share of global GDP in 2015: 34.6%, an increase from 33.2% in 2014 LIBRARY OF PARLIAMENT 3 PUBLICATION NO E

4 CANADA S FOREIGN DIRECT INVESTMENT DESTINATIONS AND SOURCES Destinations for Canadian direct investment abroad, by region, in 2016: North America 64.4%, with a stock of $676.2 billion Europe 23.4%, with a stock of $245.7 billion Asia and Oceania 6.6%, with a stock of $69.5 billion South and Central America 5.2%, with a stock of $54.7 billion Africa 0.3%, with a stock of $3.6 billion Major destinations for Canadian direct investment abroad, by country, in 2016: United States 45.2% United Kingdom 9.3% Barbados 6.5% Luxembourg 5.7% Cayman Islands 4.6% Sources of foreign direct investment in Canada, by region, in 2016: North America 50.1%, with a stock of $413.7 billion Europe 37.2%, with a stock of $307.4 billion Asia and Oceania 9.5%, with a stock of $78.1 billion South and Central America 2.9%, with a stock of $24.2 billion Africa 0.3%, with a stock of $2.4 billion LIBRARY OF PARLIAMENT 4 PUBLICATION NO E

5 Major sources of foreign direct investment in Canada, by country, in 2016: United States 47.5% Netherlands 11.3% Luxembourg 7.1% Switzerland 6.7% United Kingdom 5.1% LIBRARY OF PARLIAMENT 5 PUBLICATION NO E

6 CANADA S FOREIGN DIRECT INVESTMENT BY SECTOR Largest components of Canadian direct investment abroad, by sector, in 2016: Finance and insurance $398.9 billion Mining, and oil and gas extraction $194.0 billion Management of companies and enterprises $121.4 billion Largest components of foreign direct investment in Canada, by sector, in 2016: Manufacturing $188.5 billion Mining, and oil and gas extraction $187.3 billion Management of companies and enterprises $150.4 billion Share of foreign-controlled assets in the Canadian economy in 2014: 18.1% United States: 9.0% European Union: 5.5% Other countries: 3.6% LIBRARY OF PARLIAMENT 6 PUBLICATION NO E

7 Canadian sectors with the highest share of assets under foreign control in 2014: Manufacturing $449.5 billion Wholesale trade $171.1 billion Oil and gas extraction $252.3 billion Canadian sectors with the lowest share of assets under foreign control in 2014: Agriculture, forestry, fishing and hunting $1.8 billion Educational, health care and social assistance services $1.4 billion Construction $32.8 billion LIBRARY OF PARLIAMENT 7 PUBLICATION NO E

8 FOREIGN AFFILIATE ACTIVITIES IN CANADA AND ABROAD Canadian merchandise exports by foreign majority-owned affiliates in 2014: $259.6 billion Canadian merchandise imports by foreign majority-owned affiliates in 2014: $294.6 billion Sectors with the highest share of total Canadian majority-owned affiliate sales abroad in 2014: Services $287.9 billion Manufacturing $145.3 billion Mining, and oil and gas extraction $100.0 billion Regions with the highest share of total Canadian majority-owned affiliate sales abroad in 2014: United States $298.4 billion Europe $102.6 billion Asia and Oceania $59.7 billion LIBRARY OF PARLIAMENT 8 PUBLICATION NO E

9 DEFINITIONS Balance of payments based data: Balance of payments based data calculate trade flows using surveys of international trade and investment activity of firms and other entities. Foreign direct investment (FDI): FDI occurs when an investor residing in one country holds at least 10% equity in an enterprise resident in another country. The stock of FDI is the value of the accumulated equity owned by investors abroad; the stock changes from year to year based on flows of FDI. Foreign majority-owned affiliates: Enterprises in which a foreign business owns more than 50% of voting shares. Gross domestic product (GDP): GDP measures an economy s total production in a given year. As one entity s income is another entity s spending, GDP is equal to the total value of final sales or to the total value of incomes. LIBRARY OF PARLIAMENT 9 PUBLICATION NO E