Foreigners Reduce Holdings of Canadian Securities

Foreign investors acquired C$7.9 billion in Canadian securities in May 2026, down sharply from C$46.9 billion in April and well below market expectations of C$15.21 billion. Non-resident investors sold C$16.1 billion of Canadian equity securities, marking the largest monthly divestment since February 2025. The selloff was concentrated in the energy and mining (C$7.7 billion) and manufacturing (C$4.9 billion) sectors. Despite the equity outflows, foreign investors remained net buyers of Canadian securities for a fifth consecutive month, supported by acquisitions of federal government bonds (C$7.8 billion) and provincial government bonds (C$7.1 billion). Foreign investors also increased their holdings of money market instruments by C$6.0 billion, the largest investment since September 2025, driven primarily by purchases of private corporate paper (C$3.7 billion) and federal government business enterprise paper (C$2.8 billion).

Foreign investors acquired C$46.9 billion of Canadian securities in April 2026, far exceeding forecasts of C$8.2 billion and marking the largest inflow since October 2025. Investment was concentrated in bonds (C$48.6 billion), with a smaller contribution from equities (C$5.6 billion). Non-resident investors purchased a record C$38.5 billion of government bonds, including an unprecedented C$27.7 billion in federal government debt. While US investors accounted for most of the demand, buyers from Asia and Europe also increased their holdings. Foreign investors also acquired C$10.6 billion of provincial government bonds, the largest amount since January 2025, and added C$10.2 billion in corporate bonds, mainly issued by financial institutions. In contrast, they reduced their exposure to money market instruments by C$7.4 billion.

Foreign investors bought C$4.6 billion of Canadian securities in March 2026, the weakest monthly inflow since the start of the year and well below forecasts of C$11.4 billion. Non-resident investors reduced their holdings of Canadian equities by C$3.8 billion, following a C$9.1 billion divestment in February. The March decline mainly reflected retirements of Canadian shares tied to cross-border merger and acquisition activity. By sector, the largest divestments came from banking shares (-C$7.5 billion) and energy and mining companies (-C$6.0 billion), partly offset by investment in manufacturing stocks. Meanwhile, foreign investors added C$8.5 billion in Canadian debt securities, largely provincial government bonds denominated in euros. Non-residents also reduced holdings of corporate bonds by C$1.7 billion and federal government bonds by C$1.2 billion.