Although the global economy has recovered to some extent from the downturn of 2008, the recovery has been marked by slow growth and the highest levels of economic volatility in history. There may be no return in sight to what used to be known as “normal”.
In this climate of uncertainty and economic malaise, Canada, named by the Economist Intelligence Unit as the best place to do business among the G-7 countries over the next few years, has emerged as an attractive destination for many foreign investments thanks to its perceived combination of political stability, low corporate tax, solid fiscal and regulatory policies and abundance of natural resources. This trend is illustrated by the number of foreign companies that are aggressively pursuing investment activities in Canada, including:
China National Offshore Oil Corporation (CNOOC) is buying Canadian oil producer Nexen for CAN$15.1 billion (US$15.3 billion).
Brazil’s Vale has outlined plans to invest over CAN$10 billion (US$10.2 billion) in its Canadian operations over a five-year period.
Germany’s K+S Group is breaking ground on a new potash mine worth CAN$3.25 billion ($3.3 billion).
In addition, it seems an increasing number of individuals are investing in Canada through debt and equity securities. For example, in May 2012, non-residents bought a record CAN$26 billion of Canadian securities, mostly in the form of government bonds.
This increased investment in Canada reflects a heightened level of interest from foreign organizations, both private and state-sponsored, and may be driving Canadian enterprises and their executive teams, including C-suites and boards of directors, into a sophisticated and complex international forum. Many Canadian companies’ CFOs and their finance functions, in turn, are seeking new ways to advise their C-suite peers in this enhanced role and in the “new normal.”