Foreign direct investment in Canada up 6.9% in 2025

Foreign direct investment in Canada was up 6.9% to reach $1.6 trillion, while Canadian direct investment abroad rose 2.8% to $2.4 trillion at the end of 2025, according to Statistics Canada.

As a result, Canada’s net direct investment position dropped for the first time since 2012, down by $37 billion to $828 billion by the end of last year, the federal statistical agency reported Wednesday. The net direct investment position reflects the difference between the stock of outward and inward direct investment.

The stock of inward direct investment rose for both the services (up 7.2% to $1.1 trillion) and goods industries (up 6% to $470 billion). The management of companies and enterprises continued to make up the largest share of total foreign direct investment in Canada.

Despite ongoing trade tensions, U.S. investors increased their holdings in Canada by $54 billion to $737 billion. Investment from the U.S. remains the largest source of foreign direct investment and reached the highest level since 2018, making up 46.1% of foreign direct investment stock in Canada. Holdings from Europe followed at 33.1% of inward direct investment, or $530 billion, up by $33 billion in 2025.

The 2.8% growth of Canadian outward direct investment stock was the smallest annual percentage increase since 2010. Statistics Canada attributed this to a stronger Canadian dollar and a decline in mergers and acquisitions by Canadian investors, especially in the U.S.

Canadian direct investment in the United States was down slightly (-$9.2 billion) to $1.2 trillion by the end of 2025 and represented 49.5% of Canada’s outward direct investment position. At the same time, Canadian holdings in Europe rose $40 billion to $514 billion, making up 21.1% of total outward direct investment.

More than one-third (34.8%) of investment abroad was in the finance and insurance sector. While investment in this sector posted the greatest increase among all sectors in 2025 (up $16 billion), the gains were not as pronounced as in 2024 (up $98 billion).

Jonathan Got

Jonathan Got is a reporter with Advisor.ca and its sister publication, Investment Executive. Reach him at jonathan@newcom.ca.