Foreign direct investment into Canada reached its highest level since 2007 in 2025, fuelled largely by merger-and-acquisition activity and strong inflows from major trading partners.
BNN Bloomberg spoke with Maria Solovieva, economist at TD Economics, about the sectors attracting investment, the rise in U.K. technology deals, and why Canadian firms slowed their investment abroad amid trade uncertainty.
Key Takeaways
- Foreign direct investment into Canada reached $96.8 billion in 2025, the highest annual inflow since 2007.
- Mergers and acquisitions were the main driver of inflows, with activity concentrated in trade, transportation and financial management sectors.
- U.S. investment remained the largest contributor, while the United Kingdom emerged as the largest non-U.S. investor.
- Many U.K. transactions involved acquisitions of Canadian software firms, highlighting growing foreign interest in the country’s tech sector.
- Canadian direct investment abroad slowed sharply in 2025, particularly into the United States, as trade uncertainty weighed on long-term capital decisions.
Read the full transcript below:
ROGER: Foreign direct investment in Canada reached its highest level in 2025 — numbers last seen in 2007, nearly two decades ago. Here to talk about where those investments are coming from and what’s driving them is Maria Solovieva, economist at TD Economics. Maria, thanks very much for joining us.
MARIA: Thank you for having me.
ROGER: What has driven it to this point? Is it energy where we’re seeing the money going, to match numbers we haven’t seen in two decades?
MARIA: We can see on a sectoral basis that a few sectors are dominating. One of them is trade and transportation. We also see activity from management companies — financial companies like pension funds, banks and similar institutions. We are also seeing a bit of a slowdown, and actually some weakness in mining foreign direct investment relative to previous years. So it’s a combination of things. We’ll know a little bit more later when Statistics Canada releases additional information by country and sector.
ROGER: Okay. And Steve, I know you want to join the conversation.
STEVE: Yes. Looking at the fourth quarter, how much of the FDI increase is related to mergers and acquisitions? Specifically, AngloTech was close to $60 billion, and there were a couple of mining deals, and Onyx bought an insurance company for about $10 billion. So there’s a lot of foreign investment coming in through mergers and acquisitions. It kind of reminds me of the late 1990s when mining companies here were being purchased by foreign companies. Is this strong FDI number something to celebrate or something to be concerned about in Canada?
MARIA: Just looking at the flow and volume of foreign direct investment, it’s very difficult to say. You’re right that it was primarily driven by mergers and acquisitions — foreign direct investment flowing into Canada through those transactions. But it’s hard to assess on an aggregate basis. We really have to dive in and look at the types of companies involved.
If we see investments going into sectors like mining or manufacturing, those types of investments can help expand capacity in the long term. Like any investment, we need to understand what the flow represents. When funds are invested in a company, investors expect returns. At some point, those investors will receive returns through dividends or earnings, and some of that income can flow out of the country.
But if the investment helps expand export capacity and creates partnerships, it can be beneficial for the country overall. Canada is in a position where we do need to expand capacity. For example, if foreign direct investment is going into transportation — which is a large sector — that can help expand infrastructure capacity. Ultimately, we need to get to a point where port capacity and other transportation infrastructure can grow.
ROGER: I also want to ask about the mergers and acquisitions coming from the U.K. A lot of that was in mining. Were there other areas where money came in from the U.K.?
MARIA: From the U.K., the information we’re seeing is somewhat fragmented. We’re piecing together a mosaic using Statistics Canada data along with other sources that provide more detailed information.
One of the larger flows likely relates to investments expanding capacity in areas like transportation and possibly mining. But in terms of the number of transactions, most of the filings from U.K. investors appear to be acquisitions of software companies. Those deals may be smaller in dollar terms, but they show strong interest from U.K. investors in Canada’s technology sector.
ROGER: Steve, do you have another question?
STEVE: Yes. Roger mentioned earlier the energy sector. With Prime Minister Carney signing MOUs with Premier Danielle Smith on Nov. 27, Canadian companies aren’t very keen on investing in Canada due to regulatory and environmental issues. Bill C-69 is often mentioned as something that needs reform to attract investment. If Canadian firms aren’t investing, are we seeing foreign companies stepping in to invest in energy and infrastructure so productivity can grow?
MARIA: If we look specifically at FDI flows, there was definitely growth this year. That suggests foreign companies still see Canada as an attractive investment destination.
However, Canadian companies appear to have hit a bit of a pause button on investment this year. We also see that reflected in flows leaving Canada to invest abroad. There was a sizable slowdown in Canadian investment into the United States. Investment into other countries also slowed somewhat, but not as sharply.
Much of that hesitation appears linked to trade uncertainty. Canadian companies seem to be waiting for more clarity before committing to long-term investments. One of the clearest indicators of that in international transactions is foreign direct investment data, particularly the drop in Canadian investment in the U.S., driven largely by fewer mergers and acquisitions.
ROGER: Maria, we have to wrap it up there, but thank you very much for joining us.
MARIA: Thank you very much for having me.
ROGER: Maria Solovieva, economist at TD Economics.
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This BNN Bloomberg summary and transcript of the March 12, 2026 interview with Maria Solovieva are published with the assistance of AI. Original research, interview questions and added context was created by BNN Bloomberg journalists. An editor also reviewed this material before it was published to ensure its accuracy and adherence with BNN Bloomberg editorial policies and standards.