Wooing foreign investment: An important economic development tool
There is a lot of handwringing in Canada these days about our worsening economic performance compared to much of the world. GDP growth, GDP per capita, productivity, investment, and we get a range of diagnoses and prescriptions - some I worry might make improvements short term but kill the patient long term.
I am concerned about our international investment position. According to Statistics Canada, the flow of investment into and out of the country has been shifting in recent years. Canadian companies are investing a lot more outside the country compared to foreign companies investing here. As shown below, by 2022, Canadian companies had $726 billion more invested around the globe compared to the amount of foreign direct investment (FDI) in Canada. A decade ago, the inward and outward flow of investment was essentially the same.
I have no problem with Canadian companies investing abroad (and, by the way, the CPP which is a large investor abroad) but we should be looking to attract international investment to be put to work here. Correlation is not causation but it certainly looks like our weak investment position has emerged somewhat in parallel to our weak economic performance.