Foreign investor flight: billions of dollars have left Canada’s economy
Canadian securities are falling out of favor
On July 17th, Statistics Canada published new information showing that Canadian securities are falling out of favor with foreign investors. At the same time, Canadians are choosing to invest more of their money abroad, according to the report.
Popular no more?
Canadian securities have been a traditionally popular asset among world investors, but things haven’t been looking good recently. Statistics Canada’s latest report covered key data from May 2025 that revealed “strong foreign divestment" from Canadian securities.
Foreign investment flight
“Foreign investors reduced their holdings of Canadian securities by $2.8 billion in May, a fourth consecutive monthly divestment,” Statistics Canada’s report explained. May 2025 saw non-resident investors reduce their exposure to Canadian shares by $11.4 billion.
Reductions in all sectors
Foreign divestment was widespread but was led by reductions in shares from a variety of key sectors, including energy and mining, management of companies and enterprise, and the manufacturing sector. However, there was one positive note in the data.
Bond investment went up
Foreign investors increased their holdings of Canadian government bonds. $13.1 billion in bonds were acquired, which was a drastic reversal from April, which saw $25.1 billion dollars in divestment from Canadian bonds.
Looking at the numbers
Statistics Canada reported that in May, foreign investors acquired $8 billion in provincial bonds, $6.9 billion in federal bonds, and $4.9 billion in private corporate bonds.
The stock market grew
According to CTV News, despite the divestment from Canadian shares in May 2025, the country’s major benchmark stock index—the S&P/TSX composite—increased by 5.4% compared to April 2025, following three months of declines.
Investors at home
When it came to investors at home, Canadians reportedly increased their investments in foreign securities by a whopping $13.4 billion dollars in May. This was a major increase from April, which saw that number rise by just $4.1 billion.
Where money flowed
Canadian investors targeted US shares and reduced their holdings of US government debt. Canadians bought $11.5 billion dollars worth of foreign shares in May, something Statistics Canada noted was the largest increase since February 2025.
Other key investments
Canadian investors mainly focused on US corporate bonds and non-US bonds when it came to their investments in foreign securities, and heavily reduced their holdings of US government bonds and treasury bills.
An outflow of $16.2 billion
As a result of higher Canadian investments abroad and the foreign divestment from the country’s securities, Canada saw a $16.2 billion outflow from its economy in May, which Statistics Canada noted was the fourth consecutive month of net outflow.
