Foreign investors pile into government debt: StatsCan

Cross-border portfolio flows rise in May as offshore investors add federal paper, Canadian investors retreat

map of Canada

Foreign investors continued adding Canadian securities in May while Canadian investors trimmed their foreign holdings.

Statistics Canada reported that offshore investors added $16.9 billion worth of federal government debt in May, led by a record $11.8 billion investment in Treasury bills.

This surge in government debt investment was partially offset by investors selling off corporate debt securities and $4.9 billion worth of equities — resulting in foreign investors adding a total of $11.2 billion worth of Canadian securities, down from $12.8 billion in April.

At the same time, Canadian investors reduced their foreign securities holdings by $2.8 billion, driven by reduced holdings of U.S. government debt ($5.6 billion worth), StatsCan said.

Canadian investors also added $1.8 billion in U.S. corporate bonds, $1.1 billion in non-U.S. bonds, and $231 million in foreign stocks (down from $3.5 billion in April).

The reduction in foreign portfolio holdings reversed Canadian investors’ $2.4 billion of foreign additions in April, the national statistical agency noted.

Overall, the monthly cross-border investment trends generated a net inflow of $13.9 billion into the Canadian economy in May.