Assessing Canada's Ability to Compete for Foreign Direct Investment

The main purpose of this report is to assess Canada’s performance in attracting foreign direct investment inflows. The study reviews the literature on the benefits of FDI, analyses global and Canadian trends in FDI, identifies various factors affecting the inflow of FDI, and details how Canada ranks relative to other major OECD countries on the most influential factors. Canada’s share of world FDI has fallen markedly since 1980. The report finds that this development reflects the opening of other countries to FDI rather than a hostile climate for FDI in this country. Indeed, there is no one factor that can be identified as seriously impeding the flow of FDI to Canada. The report identifies a number of areas where Canada can potentially improve its attractiveness to FDI, including possible changes to FDI regulation, a more competitive tax regime, better infrastructure, and certain improvements in the human capital area.