Despite the 'elbows up' movement and trade tensions, Canada is on track to be a net lender to the U.S. for the ninth consecutive year in 2025, according to a TD Bank report. In the third quarter of 2025, Canadian households, businesses, and governments acquired over $230 billion in U.S. assets, with a total of approximately $255 billion expected for the year, representing 8% of Canada's nominal GDP. This figure surpasses 2024 but falls short of the peaks in 2021 and 2023, when investment surged to 15.1% and 12.9% of GDP, respectively. Meanwhile, U.S. investment in Canada is projected to reach around $150 billion for the year, indicating a continued lopsided financial outflow from Canada to the U.S. Portfolio investment played a significant role in Canadian money flowing into the U.S., with $200 billion invested in U.S. securities during the first three quarters of 2025, surpassing the previous record. However, foreign direct investment (FDI) from Canada to the U.S. decreased, with a net divestment of about $18 billion in 2025, compared to $31.6 billion in the third quarter of 2024. FDI from other countries increased by $10 billion, and Canada's direct investment in non-U.S. destinations rose by $18.9 billion, indicating a shift towards diversifying investment beyond the U.S.
