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Hence, inflows of foreign direct investment or FDI — investments made by firms or individuals in one country into business interests located in another country — serve as a valuable indicator of the attractiveness of a country as a location to do business. In this regard, the evidence is clear: Canada is a relatively unattractive location.

For example, if we compare FDI inflows to Canada to FDI inflows to all developed countries, as represented by the OECD, Canada’s recent performance is quite poor. Specifically, from 2005 to 2014, inflows of FDI to Canada averaged around 6.2 per cent of FDI inflows to all developed countries, compared to only 3.1 per cent — half as much — from 2015 to 2017.

Inflows to Canada of FDI fell to almost two-thirds less from 2015 to 2017

Things look even worse if we compare Canada to the United States alone. From 2005 to 2014, inflows of FDI to Canada averaged 24.2 per cent of FDI inflows to the U.S. and then fell to a mere 8.5 per cent (or almost two-thirds less) from 2015 to 2017.

While it’s true FDI inflows to Canada were still positive over the period 2015 to 2017, several industrial sectors including mining, oil and gas extraction and manufacturing experienced disinvestment by foreigners. The disinvestment was offset by increased FDI in sectors such as wholesaling and finance and insurance.

It’s also true that inflows of FDI to Canada decreased substantially (both absolutely and relative to other developed countries) during the recession of 2009/2010. However, Canada’s performance relative to the U.S. was substantially stronger during this period than in the 2015 to 2017 period. In addition, FDI in Canada increased from 2009 to 2010, whereas it consistently decreased over the three years from 2015 to 2017. Indeed, the inflow of FDI to Canada in 2017 was lower than in any other year from 2005 to 2017 other than in 2009.