Page 101 - Azerbaijan State University of Economics

THE JOURNAL OF ECONOMIC SCIENCES: THEORY AND PRACTICE, V.71, # 1, 2014, pp. 99-119

Foreign Direct Investment: to Canada

The United Nations, International Monetary Fund, World Bank and the Organization for

Economic Co-operation and Development each define FDI differently. While there are some

discrepancies between the definitions provided by these organizations, the overarching message

is consistent. Each definition includes a long-term investment to gain interest in an enterprise

operating outside the national boundary of the investor. For the purposes of this paper we will

utilize the definition put forth by the Organization for Economic Co-operation and Development

(OECD) which states that FDI “reflects the objective of obtaining a lasting interest by a resident

entity in one economy in an entity resident in an economy other than that of the investor.” This

lasting interest implies the existence of a long-term relationship and a significant amount of

influence by the investing party.

FDI is an important driver for the Canadian economy. From 2007 to 2011 FDI inflow

accounted for nearly 4% of Canada’s GDP. As such, the Government of Canada promotes the

country as a safe, reliable market for FDI. Invest in Canada is a branch of the government that

has a mandate to be “responsible for promoting, attracting and retaining foreign direct

investment in Canada.”

Table 1 illustrates the wide array of countries that have investment interests within Canada.

Over the course of the past five years China has seen the second most rapid amount of growth.

Table 1: A breakdown of FDI in Canada over a five-year period [http://www.statcan.gc.ca/daily-
quotidien/120419/t120419b001-eng.htm]
2007 2008 2009 2010 2011 Percentage Change
Foreign direct investment in Canada 512.3 550.5 572.8 585.1 607.5 19%
United States 288.3 292.4 299.3 318.4 326.1 13%
Netherlands 40.1 56.1 56.3 53.6 56.3 40%
United Kingdom 56.8 49.6 46.9 36.2 38.9 -32%
Luxembourg 3.6 9.4 13.9 20.9 25.3 603%
Switzerland 15.9 20.3 23 19.2 20 26%
Brazil 14 14.5 13.2 17.3 18.6 33%

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