Canada Secures Highest Foreign Investment Since 2007

Foreign direct investment into Canada surged to its highest level since 2007, reflecting markedly stronger inward capital flows and a rise in merger-and-acquisition activity that underpinned annual figures in 2025. Official data show that investment totalled C$96.8 billion for the year, up from about C$91.6 billion in 2024, with the fourth quarter contributing C$25.1 billion to the total. The sustained increase highlights robust foreign investor interest across a range of sectors.

Merger-and-acquisition deals were the primary driver of the heightened activity, particularly in trade and transportation and in management company segments, while manufacturing also recorded notable investment gains. The contribution of these sectors to quarterly and annual totals pointed to diversified capital interest beyond resource-centric industries.

The United States remained the largest source of direct investment into Canada, with U.S. capital representing nearly $52.5 billion of the total for 2025, a figure that remained broadly consistent year-on-year and underlined the depth of cross-border economic integration. Investment from other countries, although smaller in aggregate, grew modestly as well, with the United Kingdom emerging as the largest non-U.S. investor. This reflects a degree of geographical diversification in sources of international capital entering the Canadian economy.

In contrast to the surge in inbound flows, Canadian direct investment abroad slowed noticeably. Outward investment by Canadian firms dropped to approximately $79.4 billion in 2025, substantially below the $123 billion recorded in 2024, driven mainly by a pullback in overseas mergers and acquisitions. Reinvested earnings provided a partial offset but did not fully counterbalance the decline in outward flows, indicating a relative retrenchment in foreign expansion by Canadian companies.

The divergence between robust inbound investment and reduced outbound flows underscores a nuanced picture of Canada’s engagement with global capital. While strong inward interest suggests confidence in domestic opportunities, especially in traded services and infrastructure, the cooling of outward investment points to evolving corporate priorities and potentially greater caution among Canadian firms in pursuing growth abroad.