Foreign Direct Investment in Canada through 1997: A Spatial Assessment of Origins and Distribution

The empirical literature on foreign direct investment (FDI) in Canada registers a commanding share by United States-based affiliates through 1990. However, no recent inquiries extend the inquiry through the 1990s. In response, this paper examines the origins, composition, and location of FDI in Canada between 1990 and 1997 and investigates the extent to which the prevailing patterns have changed over time. While the primacy of the United States as the leading origin of investment remains unchallenged, investment inflows from Asian countries are experiencing the most rapid acceleration. In terms of industrial composition, FDI growth during the 1990s is dominated by extractive activities, while growth in the manufacturing sector is the most sluggish. The distribution of investments among Canadian provinces continues to be dominated by the four provinces where Canada's largest cities are located: Ontario, Alberta, Quebec, and British Columbia. However, Ontario's dominant share of investment transactions and values has begun to wane, and Alberta begins to challenge Quebec as the second largest provincial host of foreign capital.