Foreign investors sharply reduced their purchases of Canadian securities in March, while Canadian investors also slowed their buying of foreign assets after heavy activity earlier this year.
Statistics Canada reported that foreign investors bought $4.6 billion in Canadian securities in March. Canadian investors purchased $3.9 billion in foreign securities, well below the average monthly level recorded over the previous four months.
The transactions resulted in a net inflow of $719 million into the Canadian economy.
Foreign buying in March was concentrated in Canadian debt securities, mainly provincial government bonds issued in euros. Overall, non-resident investors added $8.5 billion in Canadian debt instruments during the month.
That activity was partly offset by continued selling in the stock market.
Foreign investors sold $3.8 billion worth of Canadian shares in March after selling $9.1 billion in February. Statistics Canada said the March decline was largely tied to share retirements linked to cross-border mergers and acquisitions.
The banking sector accounted for much of the decline, with foreign investors reducing holdings by $7.5 billion. Energy and mining shares also recorded heavy selling at $6 billion. The broader Canadian market weakened during the month, with the S&P/TSX composite index down 4.6%.
Foreign investors also reduced their holdings of federal government bonds by $1.2 billion after five straight months of strong buying. Corporate bonds recorded a $1.7 billion decline, largely because of covered bond retirements.
Meanwhile, Canadian investors continued shifting money into U.S. corporate debt.
Purchases of U.S. corporate bonds reached a record $10.4 billion in March, following another strong month in February. Nearly half of those purchases involved bonds denominated in Canadian dollars.
Canadian investors, however, reduced their holdings of U.S. government bonds by $7.8 billion and sold $2.4 billion in foreign money market instruments.
Buying of foreign stocks also slowed sharply. Canadian investors purchased $1.9 billion in foreign equities in March, down from $32.7 billion the previous month.
Despite the slowdown, investors continued adding U.S. technology shares to their portfolios. Canadian investment in U.S. equities reached a record $40.3 billion in the first quarter of 2026, driven largely by large-cap technology companies.