Canada gets record FDI since tech bubble

May 7th, 2008 - 9:33 am ICT by admin  

By Gurmukh Singh
Toronto, May 7 (IANS) Resources-rich Canada attracted a record foreign direct investment in 2007, registering the biggest jump in the past eight years. Releasing the annual report Tuesday, Statistics Canada said a spree of acquisitions of resource-based industries by foreign investors spurred the jump in the FDI into the country. With the jump in FDI, foreign direct investment holdings in Canada crossed the half-trillion dollar mark at the end of 2007.

At $500.9 billion, FDI holdings in Canada showed a rise of 14.4 percent from 2006. As a result, foreign direct investment acquisitions surpassed that realized during the high-tech bubble of 2000, Statistics Canada added.

On the other hand, Canadian direct investment abroad in 2007 declined by $15.4 billion from 2006 to stand at $514.5 billion.

Thus, Canada’s net direct investment position - the difference between Canadian direct investment abroad and foreign direct investment in Canada - shrunk to just $13.7 billion in 2007, down from $92.2 billion in 2006.

This fall also marked the second biggest decline in Canadian direct investment abroad since 1986.

Statistics attributes this to the appreciation of the Canadian dollar (loonie) against all major currency since the mid-2001.The loonie, which surpassed the US dollar by almost 10 cents last November and stayed almost at par with it since then, has risen 18 per cent against the greenback and 16 per cent the pound.

Canada ’s net direct investment position - the difference between Canadian direct investment abroad and foreign direct investment in Canada - narrowed to $13.7 billion at the end of 2007, down from $92.2 billion a year earlier. This was the smallest surplus since this account moved out of deficit in 1997.

Not surprisingly, the US remained the biggest investors in Canada and the recipient of Canadian investment abroad.

While US holdings in Canada stood at $288.6 billion in 2007, Canadian investments in the US were pegged at $226.1 billion.

At number two, Britain ’s investment here was $54.7 billion in Canada , against $54.6 billion Canadian holdings in Britain .

Brazil is the only developing country to figure among the top 10 in this two-way investment list.

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