Foreign Investment in Canada Falls in July

Foreign investors acquired C$20.7 billion of Canadian securities in July 2026, below the forecast of C$28.64 billion and down sharply from C$41.25 billion in June. Activity was led by strong foreign purchases of federal government bonds, which totaled C$22.7 billion. Since the beginning of the year, foreign investment in federal government bonds has reached an unprecedented C$104.0 billion, compared with C$13.8 billion over the same period in 2025. Consequently, the share of outstanding federal government bonds held by foreign investors rose from 40.2% to 46.5% during the first seven months of 2026. Meanwhile, a C$11.9 billion foreign divestment in money market instruments moderated overall investment, primarily involving private corporate paper (-C$7.6 billion) and federal government paper (-C$3.2 billion). Foreign investors also acquired C$7.2 billion of Canadian shares, the largest monthly investment of 2026.

Foreign investors added C$40.8 billion of Canadian securities to their holdings in June 2026, sharply higher than C$8.8 billion in May and well above market expectations of C$15 billion. The increase was led by strong foreign purchases of debt securities, which totaled C$39.9 billion. Federal government debt securities accounted for most of the increase, with non-resident investors acquiring C$25.4 billion. Non-resident investors also purchased C$16.2 billion of private corporate bonds, mainly instruments issued by Canadian chartered banks and denominated in US dollars and euros. Foreign investors acquired C$901 million of Canadian shares after divesting C$16.1 billion in May. By sector, investors mainly acquired shares in manufacturing, partly offset by divestments in the trade and transportation, and finance and insurance sectors. Foreign investors acquired a record C$100.6 billion of Canadian securities in the second quarter.

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).