Canadian resource companies are choosing to invest abroad at record levels, amid waning global interest in the nation’s energy and mining assets.
Statistics Canada reported Thursday that Canadian-based energy and mining companies invested a net C$15.5 billion outside of the country in the first three months of 2019. The exodus of Canadian capital from the sector in the quarter was almost double the previous quarterly record.
It’s a bad sign for industries already struggling to attract capital. The data suggest that Canadian-based resource companies -- who have refrained from large foreign investments in recent years -- may now be seeking alternatives outside of Canada.
Investment into Canada’s energy and mining sector from abroad was just C$123 million in the first quarter of 2019, bringing the sum of the last four quarters to C$2.8 billion.
Foreign direct investment into Canadian resource companies has essentially collapsed since oil prices began dropping at the end of 2014. Before that period investment from abroad peaked in 2013 at C$22 billion that year.
For all industries, foreign direct investment in the first quarter fell to C$12.9 billion from C$17.6 billion in the final three months of 2018.
Manufacturing was an outlier, with that sector showing a sharp increase in investment from abroad last quarter.
© 2019 Bloomberg L.P.