Canadian investors poured money into foreign markets in December while overseas investors pulled back from Canadian bonds, producing a sharp monthly net outflow of capital.
Investors in Canada bought $13.1 billion in foreign securities in December. At the same time, foreign investors trimmed $5.6 billion from their Canadian holdings, ending a six-month streak that had brought in $145.4 billion. It means a net $18.6 billion outflew from the Canadian economy.
Canadians purchased $22.6 billion in foreign shares, with $21.7 billion directed to U.S. stocks. For 2025 as a whole, Canadian investors added $133.8 billion in foreign securities, the largest annual expansion since 2021.
Bond markets told a different story. Canadians sold $9.5 billion in foreign debt instruments in December, including $11.3 billion in U.S. government bonds.
Non-residents cut $17.6 billion from their Canadian debt holdings in December, including record divestments in corporate bonds and federal government paper.
Equities provided a counterweight. Foreign investors bought $12.1 billion in Canadian shares in December after selling in November. On a full-year basis, they reduced their exposure to Canadian equities by $19.4 billion, due to share buybacks.
The pattern over 2025 reflects shifting rate expectations and global market performance. The Bank of Canada and the U.S. The Federal Reserve cut policy rates over the year. The Canadian dollar weakened against most major currencies and Canadian investors responded by increasing exposure to U.S. corporate assets, while foreign investors concentrated their Canadian purchases on private corporate bonds and federal debt rather than equities.
The result is a more internationally exposed Canadian investor base and a domestic market increasingly reliant on foreign demand for its bond issuance, even as that demand proved uneven late in the year.