No, I’m implying that we have to start somewhere. I’m not suggesting this is going to happen overnight. But unless Canada starts actually putting an effort into diversifying trade, then nothing will improve.
Couldn’t you also theoretically hit net 0 while having 100% of our trades going through the US? I don’t know what the “lender” part of “net lender” means, so I could be wrong here, but it seems like this isn’t the right metric to look at if what you care about is trade diversification.
Basically, the report from TD highlights a paradox in Canada’s economic relationship with the US. Being a net lender simply means we’re sending more capital south than we’re receiving.
Canadian money poured into US assets at a record pace in 2025, driven almost entirely by portfolio investment such as stocks and bonds. Investors were chasing higher US interest rates and a strong tech sector, even though the report notes Canadian equities actually had better returns. This is classic hot money flow, and it shows how deeply our financial markets are linked right now.
However, FDI numbers appear to be collapsing with investment from Canadian companies directly in U.S. businesses being at 2009 low. The report suggests trade uncertainty and tariff environment make businesses hesitant to commit long-term capital to projects down south.
The good news is that the data in the report suggests we might starting to diversify. While American FDI into Canada slowed, investment from other countries actually rose, and Canadian investment into other countries also jumped significantly. New trade talks with India and China will likely help the process along as well.
The takeaway for me is that our financial portfolios are still wedded to Wall Street, but our corporate investment strategy is starting to look elsewhere.
So is that better or worse than being a net borrower from the US?
why is this a binary choice?
A number is either positive or negative, no? Unless you manage to hit exactly 0, but I don’t think that’s possible in this scenario.
I mean we can just not invest in the Us and diversify trade. The US investment in Canada has no ditect relation to Canadian investment into US.
Implying it’s simple to get everyone to stop buying anything tied to the US, and everyone in the US to do the same with Canada.
No, I’m implying that we have to start somewhere. I’m not suggesting this is going to happen overnight. But unless Canada starts actually putting an effort into diversifying trade, then nothing will improve.
Couldn’t you also theoretically hit net 0 while having 100% of our trades going through the US? I don’t know what the “lender” part of “net lender” means, so I could be wrong here, but it seems like this isn’t the right metric to look at if what you care about is trade diversification.
Basically, the report from TD highlights a paradox in Canada’s economic relationship with the US. Being a net lender simply means we’re sending more capital south than we’re receiving.
Canadian money poured into US assets at a record pace in 2025, driven almost entirely by portfolio investment such as stocks and bonds. Investors were chasing higher US interest rates and a strong tech sector, even though the report notes Canadian equities actually had better returns. This is classic hot money flow, and it shows how deeply our financial markets are linked right now.
However, FDI numbers appear to be collapsing with investment from Canadian companies directly in U.S. businesses being at 2009 low. The report suggests trade uncertainty and tariff environment make businesses hesitant to commit long-term capital to projects down south.
The good news is that the data in the report suggests we might starting to diversify. While American FDI into Canada slowed, investment from other countries actually rose, and Canadian investment into other countries also jumped significantly. New trade talks with India and China will likely help the process along as well.
The takeaway for me is that our financial portfolios are still wedded to Wall Street, but our corporate investment strategy is starting to look elsewhere.
Right, so that’s total investments that we want to reduce, not net.
I mean, it’s trinary. They lend more to us, we lend more to them or it’s totally even.
It’s just not clear what bigger picture thing to take away from this fact, I guess.
There’s zero connection between these two things.