Canada: A net creditor for the first time in its history

The balance of payments data were revised with the release of the 2008Q1 numbers, and something very important happened back in 2006 - estimates for Canada's net international investment position went positive:

The sharp appreciation of the Canadian dollar during 2007 reduced the value (in CAD terms) of foreign holdings, but the precedent has finally been set.

This is a very big deal indeed. Foreign investment has played an important role in the development of the Canadian economy since long before the term 'Canadian economy' had any meaning. But in the past few decades, foreign ownership has become an obsession for Canadian nationalists, and - to the chagrin of sentient observers - they've been occasionally successful in making it difficult for foreigners to invest in Canada.

But now that Canada's holdings abroad are at the levels of foreign holdings in Canada, it is to be hoped that it will be harder to make the case for slowing the flow of capital into Canada.

Comments

[Syadav]

It is a fact that in an economy in the initial stages it need the external investment and once it is self sufficient then it has all the rights and freedom to protect its ecomy from outside investment and influence,I an in for the author view .

[Northern Observer]

I understand why competitive advantage works.
What I questions is the actual macroeconomic situation.
If you have a large country that controls the worlds de facto reserve currency and they persue a super easy monetary policy; aren't their firms then subsidised in the credit department? Were the Alcan and Inco purchases essentially easy money frauds based around loose monetary policy from the USA? Granted, the bubble has bursed and the shoe is now on the other foor, but Canada no longer has a minining company left to act as an international aggregator. Maybe there was a case for regulation based on America's fiscal policies?

[westslope]

Err, Canada still has integrated miner Teck Cominco which owns copper, coal, zinc, lead, gold, molybdenum and oilsands assets throughout the western hemisphere. the dual class share structure protects it from hostile takeover.

Market cap is a modest C$17 Billion. The acquisitions in recent years have been inspired. Nothing less.

Want more Canadian majors? Lobby for a national securities regulator.

[Darryl Wright]

Ummm maybe Canada can loan the US some money. I think they are going to need a few trillion in spare change here pretty soon.

[btg]

"But in the past few decades, foreign ownership has become an obsession for Canadian nationalists, and - to the chagrin of sentient observers - they've been occasionally successful in making it difficult for foreigners to invest in Canada."

Funny, but South Korea and Japan discouraged foreign investment, yet their ecomonies grew much faster than ours over the last 50 years... imagine how things would`be if they had followed laissez faire policies and let the Big Three buy up their auto industries when they were small and vulnerable to takeover.