The Benefits of Foreign Direct Investment: How Investment in Both Directions Drives Our Economy

The Conference Board of Canada, 7 pages, March 6, 2006
Executive Action Report by ,
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In this report, we examine the benefits of foreign direct investment-both Canadian investment abroad and foreign investment in Canada-and recommend ways to increase both types.

Document Highlights

In this report, we examine the benefits of foreign direct investment (FDI)—both Canadian investment abroad (outward FDI) and foreign investment in Canada (inward FDI). There is a growing and mutually beneficial interdependence between inward and outward FDI and trade. Canadian businesses are relying on outward FDI to build global supply chains. And Canada benefits enormously from inward investment, which creates jobs, boosts productivity, spurs trade and creates wealth for Canadians.

Fears about FDI, rooted in protectionist thinking from the 1970s, do not reflect current realities. Investment is now closely linked to trade and our economy depends heavily on trade. However, Canada is slipping behind other leading countries in our ability to attract FDI and in the competition for new investment opportunities abroad. We need to recognize the seriousness of this problem and act quickly to make Canada a more attractive destination for FDI and to foster Canadian investments overseas.

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