Rising foreign investment in Canada doesn't tell the whole story, economists say

Statistics Canada says the flow of foreign direct investment into the economy came close to a two-decade high last year, but economists caution the volume of capital entering Canada isn't the only metric that matters.

Agency data released last week show foreign direct investment hit $96.8 billion last year, the highest level recorded since 2007.

StatCan says more than half of last year's foreign investment came from the United States, while TD Bank economist Maria Solovieva notes Canada was pulling back on investments south of the border during the tariff dispute.

Solovieva says Canada may see more foreign investment if Prime Minister Mark Carney's global travels in search of trade deals start to bear fruit in future years.

Kaylie Tiessen, chief economist at the Canadian SHIELD Institute think tank, says foreign direct investment levels can signal to investors that Canada is a safe and attractive destination to build a business.

But she also warns that not all foreign direct investment is created equal and global firms buying up Canadian companies and extracting revenues do nothing to make the economy more resilient.

Picture Courtesy: THE CANADIAN PRESS/Nathan Denette