Posthaste: Canada is killing it attracting this foreign investment

Global financial heavyweights came to Toronto last week to “peer into our shop window” during this country’s first investing summit. The government’s goal is to attract $1 trillion in investment in Canada over the next five years.

Yet behind the scenes, data shows that billions of dollars of foreign money has already been flowing into the country — and at a record pace.

According to the latest numbers on international securities transactions, foreign portfolio investors are more than willing to invest in Canada, say National Bank of Canada’s Taylor Schleich and Warren Lovely.

By July of this year non-residents had accumulated a record $179 billion in Canadian securities.

This wasn’t the case a year ago when foreigners stopped buying, at least in part because of the cloud trade uncertainty cast over the country.

Now they are piling in, and with Canadians once again being net buyers of foreign portfolio securities, the result has been a “massive swing in net portfolio flows,” said the strategists.

Last year $72 billion flowed out of Canada in the first seven months of 2025; this year $124 billion flowed in — “a nearly $200 billion turnaround.”

What foreigners are most interested in are our bonds, and the $210 billion accumulated by July of this year is more than any full-year tally on record, they said.

Government of Canada bonds are especially popular, with foreigners buying over $100 billion, almost twice the increase in the federal bond stock.

That has pushed the foreign-held share of the GoC bond market above 46 per cent, a new record high.

While this Canadian bond bonanza does not directly spur capital spending or jobs, it does “represent a nod of confidence in Canada,” said BMO Capital Markets chief economist Douglas Porter.

It also helps to keep government borrowing costs down, he said, pointing out that yields on 10- and 30-year GoC bonds are running about 100 basis points lower than their U.S. Treasury counterparts.

Foreign investors bought $20.7 billion of stocks and bonds in July alone, bringing the 12-month total to an “astonishing” $295.5 billion or 8.7 per cent of this year’s gross domestic product, he said.

Reliance on non-residents in the bond market does have its risks, but indirectly these foreign buyers are supporting the government’s “ambitious” spending plans, said Schleich and Lovely.

“And after [last] week’s investment summit, hopefully Canada’s story is compelling enough to draw some direct investment too,” they said.

Meanwhile, Canadians have also been busy buying bonds outside their country. Over the past 15 years, Canada has quietly become the fifth-largest holder of U.S. Treasuries, said Porter.