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Figure 1 – World FDI Stock, Exports and GDP, 1980-2005
The growth of world foreign direct investment stock outpaces increases in world gross domestic product (GDP) and in world exports.  From 1995 to 2005, growth of world foreign direct investment stock was 29.7%, while growth in world exports was a little above 15% and world GDP growth was 6.7%.

Figure 2 – Average Annual Labour Productivity Growth, 2001-2005
Between 2001 and 2005, Canada’s average annual labour productivity growth was 1.1%.  This ranks Canada sixth among the G7, ahead of Italy. The United States shows the strongest labour productivity growth in the G7, at 2.5% annually.  Canada is also behind the OECD average annual labour productivity growth rate of 1.9%.

 Figure 3 – Relative Labour Productivity in the Total Economy, Canada, 1961-2006
Canada’s labour productivity (GDP per hour worked) level continues to lag that of the United States.  In 2006, Canadian labour productivity for the whole economy was 82.5% of United States levels, down considerably from 89.3% as recently as 2000.

Figure 4 – FDI Stocks as a Percentage of GDP among the G7, 2006
In 2006, Canada ranked third among the G7 in both inward and outward stock of foreign direct investment (FDI).  Inward FDI stock amounted to 30.4% of GDP while outward FDI stock was 35.4%.  Canada’s FDI stock as a percentage of its GDP is well above the US percentage, and above world FDI stock as a percentage of world GDP.

Figure 5 – FDI in Canada, by Top-10 Sources, 2006
The stock of foreign direct investment (FDI) in Canada continues to be heavily dominated by the United States, which was responsible for 61% of the total FDI in Canada in 2006.  The United Kingdom was the second highest source of FDI in Canada at 8.7%. Other European countries, Japan, Brazil and Bermuda were also in the top 10.

Figure 6 – Canadian Inward and Outward Mergers and Acquisitions (M&A) Activity, 1993-2006
Between 1993 and 2006, Canadian inward and outward M&A activity reached a peak in 2000 with CAD$64 billion in foreign acquisitions of Canadian firms and nearly CAD$47 billion in Canadian acquisitions of foreign firms.  This was followed by a continuous decline in M&A activity until 2004 where there was a huge increase in the value of foreign acquisitions by Canadian firms.  In 2006, foreign acquisitions of Canadian firms were valued at nearly CAD$55 billion, with Canadian acquisitions of foreign firms valued at about CAD$7 billion.

Figure 7 – FDI Flows into Canada and Canadian Direct Investment, 1993-2006
Between 1993 and 2006, FDI inflows to Canada reached a peak of CAD$99 billion in 2000, declining substantially until 2004. FDI in Canada increased significantly in 2005 and 2006, reaching the second highest level in any year since 1993. Canadian direct investment abroad also declined from a peak in 2000, but has increased in recent years.

Figure 8 – Canadian Cross-border M&A Transactions, 1994-2007 YTD
From 1994 to mid 2007, the total number of deals of Canadian acquisitions abroad outnumbered the number of deals of foreign acquisitions in Canada by 1,942.  However, over this period, the value of foreign acquisitions was higher than the value of Canadian acquisitions abroad by over CAD$86 million. 

Figure 9 – FDI in Canada, 1986-2006
FDI in Canada has increased steadily over the past 20 years. Since 1995 Canadian direct investment abroad (CDIA) has exceeded FDI in Canada. By the end of 2006, the net direct investment position (the difference between CDIA and FDI in Canada) increased to $74.4 billion, up from $52 billion a year earlier. 

Figure 10 – Canadian Foreign Direct Investment Abroad, by Top-10 Destinations, 2006
In 2006, total Canadian direct investment abroad (CDIA) was up in all major destinations.  The United States continued to be the most important destination for CDIA, amounting to nearly CAD$224 billion in 2006 (42.7% of total CDIA). CDIA was second highest in the United Kingdom, totalling CAD$59 billion (11.3%) in 2006. Other European countries, Barbados and Bermuda make up the rest of the top 10.

Figure 11 – Canadian Direct Investment Abroad, by Industry, 2006
Canadian direct investment abroad (CDIA) is significantly focused in finance and insurance, with 44% of total CDIA in 2006. The second highest total is in energy and metallic minerals with approximately 23% of the total.  Services and retailing is the next highest industry, at 13% of the total.

Figure 12 – Canada’s Share of North American Inward FDI Stock, 1980-2005
Canada’s share of North American inward FDI stock has declined since 1980 when it was nearly 40%, to 16.3% in 2005.