Foreign Direct Investment in Canada Plunges on Oil Exodus
By Theophilos Argitis
Foreign direct investment into Canada plunged last year to the lowest since 2010, hampered by an exodus of capital from the nation’s oil patch and worries about the fate of the North American Free Trade Agreement.
Falling foreign direct investment is important. The country’s economy has relied heavily on foreign funding since the global recession — totaling more than C$500 billion since 2008 and about C$130 billion over the past two years alone, according to balance of payment data.
ConocoPhillips and Royal Dutch Shell Plc are among the companies that led the exodus from the nation’s energy sector last year. The biggest foreign investment in Canada last year was the purchase by Hong Kong’s richest man, Li Ka-Shing, of Reliance Home Comfort, a water heater and air conditioner firm for C$2.82 billion.
And the numbers continue to move in the wrong direction. According to Bloomberg data, foreign acquisitions of Canadian businesses fell to C$3.8 billion in the fourth quarter, the lowest since 2009.
— With assistance by Erik Hertzberg
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