The Future of Foreign Ownership in Canada
According to Statistics Canada, foreign countries controlled $2.06 trillion in Canadian assets in 2017—the 10th consecutive year of decline in the foreign-controlled share of Canadian assets.
Via Statistics Canada,
“Enterprises controlled from the United States maintained the largest overall share of foreign-controlled assets in Canada (50.9%), followed by the United Kingdom (10.8%) and Japan (5.8%).”
The country with the fourth most control of Canadian assets in 2017 was China (3.2%); while this may seem like a small figure, China’s small share of foreign-controlled Canadian assets is still more than half of Japan’s—a strategically aligned trading partner who Canada has only deepened trade relations with after the ratification of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).
China Remains Focused On Canadian Metals & Minerals Assets
Generally speaking, Asian ownership of Canadian assets has been increasing over the past 10 years while American and European ownership has been decreasing. Although this trend could be beginning to slow down thanks to the fact that Canada is still caught in the middle of the U.S.-China trade war, Canada has one sector that’s unlikely to feel the scorn of Chinese investors: metals and minerals.
Even when Chinese investment in Canada fell by almost half in 2017, Canada’s metals and minerals sector appeared to remain an area of interest for Chinese investors; after all, it was in 2017 when China’s Zijin Mining Group Co. Ltd. paid a handsome $1.86 billion for B.C.’s Nevsun Resources Ltd.
Past precedent aside, China Gold International Resources Corp.—a subsidiary of centrally owned China National Gold Group (one of China’s largest gold miners)—recently stated that they’re on the lookout for acquisitions. Interestingly enough, it was just this past June that China Gold International Resources was rumoured to be exploring the acquisition of Canadian gold mining company Iamgold Corp…
Canada’s Metals and Minerals Sector May Withstand Foreign Divestment
Whether its Canadian assets or securities, foreign investors seem to be becoming less and less interested in what Canada has to offer. That said, Canada’s metals and minerals sector may be one of the few industries in Canada that’s able to continue to attract foreign investment (Chinese or otherwise)—especially if gold continues to hang on around $1500 per ounce.