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Foreign and domestic investment in Canada

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The Daily


Thursday, January 4, 2007

Foreign-controlled firms in Canada recorded double-digit investment growth in 2006, propelled by investment in mining and oil and gas extraction, retail trade and manufacturing.

Investment by foreign-controlled establishments increased 10.7% to an estimated $53.8 billion in 2006. At the same time, investment by domestic firms rose 7.4% to $153.2 billion.

These figures refer to investment in physical properties, specifically machinery, equipment and non-residential structures. They do not pertain to investment in equities, bonds or money markets.

American-controlled establishments accounted for the majority of foreign investment with a share of 69.6%. Those from Germany were a distant second at 6.6% of the total, followed by Japanese firms at 5.6%.

American-controlled investment amounted to nearly $37.5 billion in 2006, up 7.9% from 2005.

Foreign firms accounted for 43.4% of total investment in the Northwest Territories, the highest proportion in the nation. It was followed by Newfoundland and Labrador with 39.1% and Nova Scotia at 31.6%. In Ontario, the proportion was 28.2%.

Two provinces alone, Ontario and Alberta, accounted for 63.2% of total foreign capital investment.

Investment by foreign-controlled establishments was concentrated in a handful of industries.

Three industries, mining and oil and gas extraction; finance and insurance; and manufacturing, accounted for just over two-thirds (68.5%) of the total.

In the manufacturing sector, the robust investment growth among foreign-controlled firms continued, in sharp contrast with the lacklustre performance of domestic firms, among which investment growth has been flat.

In the retail trade sector, foreign firms boosted capital spending by 36.4%, while the increase among domestic firms was only 4.0%.

In the mining and oil and gas extraction industry, investment by domestic firms slowed, while investment by foreign firms accelerated. Foreign firms invested $1.7 billion more than they did in 2005, equivalent to a 12.3% increase.

Capital investment in machinery, equipment and non-residential construction in Canada by country of control, 2006 
  $ millions
Canada  153,204.7
Foreign  53,828.1
United States  37,471.8
Germany  3,534.2
Japan  3,033.7
Netherlands  2,711.6
United Kingdom  2,434.7
France  1,438.9
Hong Kong  363.6
Switzerland  285.6
Italy  164.8
Sweden  144.5
Other countries  1,777.3
Total 207,032.8


Foreign and domestic investment in machinery, equipment and non-residential construction by province, 2006 
  Domestic Foreign Total
  $ millions
Canada  153,204.7   53,828.1   207,032.8 
Newfoundland and Labrador  1,846.9  1,187.7  3,034.6
Prince Edward Island  480.6  50.3  530.9
Nova Scotia  3,213.1  1,484.7  4,697.9
New Brunswick  2,888.6  485.9  3,374.5
Quebec  26,167.0  7,876.1  34,043.1
Ontario  48,330.8  18,961.9  67,292.6
Manitoba  5,024.2  1,256.5  6,280.7
Saskatchewan  5,381.7  1,664.8  7 046.5
Alberta  40,777.0  15,076.8  55,853.8
British Columbia  17,476.4  5,072.2  22,548.6
Yukon  362.8  8.2  371.0
Northwest Territories  912.7  699.7  1,612.4
Nunavut  343.0  3.5  346.5


Note: This study was conducted in partnership with the Department of Foreign Affairs and International Trade.

Definitions, data sources and methods: survey number 2803.

The 2006 issue of Foreign and Domestic Investment in Canada (61-232-XIB, free) will soon be available.

For more information, or to enquire about the concepts, methods or data quality of this release, contact Irfan Hashmi (1-877-338-2368, 613-951-3363; irfan.hashmi@statcan.gc.ca), Investment and Capital Stock Division.