Foreign Demand for Canadian Bonds Surges

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.

Foreign investors bought C$6.2 billion of Canadian securities in February 2026, a sharp drop from C$46.8 billion in January. They sold C$9.2 billion of Canadian equities, led by energy and mining (-C$9.4 billion). Exposure to money market instruments fell C$7.3 billion, mainly in federal (-C$7.3 billion) and provincial (-C$3.5 billion) paper. Meanwhile, they acquired C$22.6 billion in bonds overall, including C$11.1 billion in corporate bonds, mostly foreign-currency denominated issues from Canadian financial firms. Federal government bonds attracted C$8.4 billion, continuing strong demand since Q4 2025.