Economic and Social Reports, November 2025

There are five new articles available in today's release of Economic and Social Reports.

Canadian investors continue to rely on US securities during trade tensions

For over a decade, Canada has maintained a net asset position, meaning the value of its international financial assets surpasses its international liabilities. This net asset position has almost tripled in recent years, rising from $691 billion just before the COVID-19 pandemic to $1.86 trillion in the second quarter of 2025. Net claims on US financial assets accounted for the growth in Canada's net financial position with the world. The growth of Canada's net position in portfolio assets in the United States has been a major contributor to the increase in Canada's net asset position. The article "International transactions in securities during recent Canada-U.S. trade developments" examines how the net acquisitions of foreign securities by Canadian investors and the net acquisitions of Canadian securities by foreign investors have evolved as trade tensions between Canada and the United States escalated in 2025.

As the trade uncertainty intensified in early 2025, net acquisitions of foreign securities by Canadian investors increased from February to June, with Canadian investors adding $61.0 billion in US securities during the first half of 2025. At the same time, foreign investors reduced their exposure to Canadian securities, resulting in a net decrease of $22.4 billion during the first half of the year. Together, these generated a net outflow of funds from the Canadian economy totalling $84.7 billion during the first half of 2025. By comparison, these cross-border transactions generated a net inflow of $80.6 billion in 2024.

Canadian investors continued to increase their exposure to US portfolio assets during July and August 2025, adding $31.9 billion in investment and equity fund shares, government and corporate bonds and money market instruments. As well, foreign investors rekindled their demand for Canadian securities during the summer months, with net purchases totalling $49.0 billion, more than offsetting the cumulative divestment of $22.4 billion in the first half of the year.

Geographic proximity between adult children and their parents in Canada

How far adult children live from their aging parents can affect family support, caregiving and job choices. Yet, there is little information on the residential patterns of families in which not all members live under the same roof. As such, less is known about the residential choices of non-cohabiting family members over time.

The article "Geographic proximity between adult children and their parents in Canada" tracks cohorts of Canadians who lived with their parents during their teens in the 1980s, studying the distance from their parents using tax data from 1997 to 2019.

Despite Canada's size, for almost three-quarters of the child-parent combinations studied, adult children in their 50s lived within 100 kilometres of their parents and just over half lived within 20 kilometres of their parents from 2016 to 2019. Larger proportions of adult children in Prince Edward Island (58% to 61%) and Quebec (56% to 58%) were estimated to live within 20 kilometres of their mothers and fathers, while Saskatchewan had the lowest proportion of adult children estimated to live nearby their mothers (45%) and fathers (43%).

There were also differences across several sociodemographic characteristics; for example, adult children were more likely to live close to their mothers than their fathers from 2016 to 2019. Other findings suggest that adult children in their 50s were more likely to live within 20 kilometres of their parents if they had lower household incomes, lived with children, had older parents or had parents residing in rural areas. These findings stand to inform debates about informal caregiving needs, the ability to provide informal care and its potential implications on labour mobility in Canada.

Citizenship patterns among recent immigrants in Australia and Canada

Whether immigrants become citizens of their destination country is often affected by the characteristics of their source country. Immigrants from nations with constrained political rights and lower economic development may be more likely to seek citizenship compared with those from other nations. The article, "Source country matters: Citizenship trends among recent immigrants in Australia and Canada," examines changes in citizenship rates from 2011 to 2021 in both countries, focusing on differences by source country.

Australian and Canadian census data reveal that, among immigrants admitted 6 to 10 years before each census, the citizenship rate fell from 68% to 50% in Australia and from 77% to 56% in Canada. In Australia, the steepest declines occurred among immigrants from China (-38 percentage points), Colombia (-31 percentage points), Vietnam (-22 percentage points) and India (-21 percentage points). In Canada, the largest drops were among immigrants from China (-35 percentage points), the Philippines (-30 percentage points), South Korea (-29 percentage points) and India (-25 percentage points).

In Australia and Canada, declines were most pronounced among immigrants from countries that experienced significant improvements in living standards or increases in passport strength. For instance, from 2011 to 2021, gross domestic product per capita (purchasing power parity adjusted) increased 82% in China, 56% in India and 56% in Vietnam, compared with 10% in Australia and 6% in Canada. The passport strength (measured by the number of countries passport holders can access without a visa) increased by 75 countries for Colombia, 39 for China and 27 for South Korea.

These findings suggest that immigrant citizenship patterns should be understood transnationally rather than solely looking at the destination country. Improvements in source-country economies and expanded global mobility options may have reduced immigrant incentives for citizenship in destination countries.

New evidence on the role of diversity in shaping innovation across Canadian cities

The study "Innovation in diversified cities: Evidence from Canada's urban areas" examines how cultural and industrial diversity influenced innovation in 152 Canadian urban areas from 2001 to 2021. It found that cultural and industrial diversity were significantly associated with urban innovation.

When the cultural diversity of a region increases significantly, innovation tends to increase significantly, from about 13% to 82%. Industrial diversity also stimulates innovation, but to a lesser extent, from about 7% to 37%. When these two types of diversity are combined, they create an additional positive effect of about 2% to 12%. It's important to note that these benefits are amplified in regions with more recent immigrants, showing how newcomers play a key role in spreading and combining knowledge.

This study highlights the importance of integrating immigration, industrial, and innovation policies to foster resilient and productive urban economies. Canada's multicultural and economically diverse urban landscape provides a compelling context for these findings, which have broad implications for advanced economies seeking to leverage diversity for innovation-driven growth.

Insights on Canadian exporters' response to US steel and aluminum tariffs in the past

It will take some time to determine the full impact of the US tariffs on the Canadian economy in 2025. Nevertheless, insight into the impacts of the new tariffs can be gained by examining the effects of tariffs in the recent past. A new study examines how Canadian steel and aluminum producers adjusted to 25% tariffs on steel and 10% tariffs on aluminum imposed by the United States from June 2018 to May 2019. To learn more, read the Daily release, "Lessons from the United States 2018/2019 steel and aluminum tariffs."