Foreign investment in Canadian securities slowed to $7.9 billion in May as overseas investors cut their exposure to Canadian stocks, while Canadian investors bought $22.3 billion in foreign securities, producing a net capital outflow of $14.4 billion from the Canadian economy.
The May figures followed a much stronger month in April, when foreign investors purchased $46.9 billion in Canadian securities. Canadian investors had reduced their foreign holdings by $11.4 billion in April before returning to international markets in May.
Foreign investors remained active in Canada’s bond market, purchasing $18.0 billion in bonds. Federal government bonds attracted $7.8 billion, while provincial government bonds drew $7.1 billion. The buying followed an exceptional $38.5 billion investment in those securities in April.
Demand for Canadian short-term debt also strengthened. Non-resident investors purchased $6.0 billion in money market instruments, the largest monthly investment since September 2025. Most of the purchases were in private corporate paper, at $3.7 billion, and federal government business enterprise paper, at $2.8 billion.
Foreign investors sold a net $16.1 billion in Canadian shares during May, the largest monthly divestment since February 2025. Energy and mining companies accounted for $7.7 billion of the selling, while manufacturing shares recorded net sales of $4.9 billion. The banking sector stood out as an exception, attracting $8.2 billion in foreign investment.
Despite the sharp reduction in equity holdings during the month, foreign investors have remained net buyers of Canadian securities throughout 2026, purchasing a total of $111.9 billion since January.
Canadian investors directed most of their money to U.S. markets in May.
They purchased $11.0 billion in foreign equities, including $16.0 billion in U.S. shares, with technology companies accounting for much of the buying. Those purchases were partly offset by $5.0 billion in sales of non-U.S. equities, primarily European stocks.
Canadian investors also acquired $10.2 billion in foreign bonds. U.S. corporate bonds accounted for $11.0 billion of that total, including a record $6.9 billion invested in Canadian dollar-denominated issues.
Sales of U.S. government bonds continued for another month. Canadian investors reduced their holdings by $1.7 billion in May, bringing total net sales of U.S. Treasuries to $22.5 billion since the start of the year.