Global financial heavyweights came to Toronto last week to “peer into our shop window” during this country’s first investing summit. The government’s goal is to attract $1 trillion in investment in Canada over the next five years.
Yet behind the scenes, data shows that billions of dollars of foreign money has already been flowing into the country — and at a record pace.
According to the latest numbers on international securities transactions, foreign portfolio investors are more than willing to invest in Canada, say National Bank of Canada’s Taylor Schleich and Warren Lovely.
By July of this year non-residents had accumulated a record $179 billion in Canadian securities.
This wasn’t the case a year ago when foreigners stopped buying, at least in part because of the cloud trade uncertainty cast over the country.
Now they are piling in, and with Canadians once again being net buyers of foreign portfolio securities, the result has been a “massive swing in net portfolio flows,” said the strategists.
Last year $72 billion flowed out of Canada in the first seven months of 2025; this year $124 billion flowed in — “a nearly $200 billion turnaround.”
What foreigners are most interested in are our bonds, and the $210 billion accumulated by July of this year is more than any full-year tally on record, they said.
Government of Canada bonds are especially popular, with foreigners buying over $100 billion, almost twice the increase in the federal bond stock.
That has pushed the foreign-held share of the GoC bond market above 46 per cent, a new record high.
While this Canadian bond bonanza does not directly spur capital spending or jobs, it does “represent a nod of confidence in Canada,” said BMO Capital Markets chief economist Douglas Porter.
It also helps to keep government borrowing costs down, he said, pointing out that yields on 10- and 30-year GoC bonds are running about 100 basis points lower than their U.S. Treasury counterparts.
Foreign investors bought $20.7 billion of stocks and bonds in July alone, bringing the 12-month total to an “astonishing” $295.5 billion or 8.7 per cent of this year’s gross domestic product , he said.
Reliance on non-residents in the bond market does have its risks, but indirectly these foreign buyers are supporting the government’s “ambitious” spending plans, said Schleich and Lovely.
“And after [last] week’s investment summit, hopefully Canada’s story is compelling enough to draw some direct investment too,” they said.
Meanwhile, Canadians have also been busy buying bonds outside their country. Over the past 15 years, Canada has quietly become the fifth-largest holder of U.S. Treasuries, said Porter.
If current trends hold, within 18 months it could pass Belgium and China to become the third largest holder, leaving only Japan and the United Kingdom higher.
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The U.S. Federal Reserve hasn’t been this terse since 2007.
At 130 words, this past week’s Federal Open Market Committee statement explaining its decision to lift interest rates by a quarter point was the shortest since Ben Bernanke had the helm at the beginning of the financial crisis, say Bank of America strategists.
Current Federal Reserve chair Kevin Warsh, who made it clear in his confirmation hearing that he thought the Fed talked too much, has made a deliberate effort to limit official statements and forward guidance in order to get stronger signals from financial market participants.
His first statement in June was 132 words, down from the 345 words from his predecessor Jerome Powell in April.
The strategists are OK with this, “saying return of credibility and end of “oversharing” are long-term bullish for market resilience, but require higher bond risk premiums.”
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Variable rates are having a moment. Discounts have improved noticeably in recent weeks. And wouldn’t you know it, that always seems to happen right as markets start pricing in near-term Bank of Canada hikes, says MortgageLogic.news strategist Robert McLister.
Despite the talk of rate increases, roughly half of borrowers are still choosing variable rates. McLister fills us in on where rates are now and where they may be going. Read more
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McLister on mortgages
Want to learn more about mortgages? Mortgage strategist Robert McLister’s Financial Post column can help navigate the complex sector, from the latest trends to financing opportunities you won’t want to miss. Plus check his mortgage rate page for Canada’s lowest national mortgage rates, updated daily.
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Today’s Posthaste was written by Pamela Heaven with additional reporting from Financial Post staff and Bloomberg.
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Posthaste: Canada is killing it attracting this foreign investment — even without Carney's summit
2026-09-21 12:04:35
