1. Recent FDI Trends and DFAIT’s FDI Results
Presented by:
David Hartman, Director
Investor Services Division (DFAIT)
C-11 Meeting, October 4

2. OBJECTIVES Examine recent global FDI trends
Review FDI trends in Canada
Report on highlights of DFAIT’s results for FY
Present conclusions and discuss outlook

3. Average annual growth of global commerce activities, (%)
Despite a recent sharp drop in global investment flows,
FDI remains the main engine of globalization
Average annual growth of
global commerce activities, (%)
Source: BIA compilations based on data from UNCTAD

4. Cumulative FDI Outflows Cumulative FDI Outflows by country
FDI Sources: Developed economies remain the main sources but emerging economies are becoming more important
Cumulative FDI Outflows
by region (%)
Cumulative FDI Outflows by country
Top 15 countries,
Others
Latin
America
Asia and Oceania
North America
Top
Sources
Europe
Source: BIA compilations based on data from UNCTAD

5. Cumulative FDI Inflows Cumulative FDI Inflows by country
FDI Destinations: The shift of FDI inflows toward emerging economies continue with the BRICs as key destinations
Cumulative FDI Inflows
by region (%)
Cumulative FDI Inflows by country
Top 15 countries,
Others
Latin
America
Asia and Oceania
Top
Destinations
North America
Europe
Source: BIA compilations based on data from UNCTAD

6. Over the last decades, there has been
a significant shift toward FDI in services
Share of global inward FDI flows
by major economic sectors (%)
Services
(54.3%)
Primary
(4.5%)
Services
(67.7%)
Primary
(10.3%)
Manufacturing
(41.2%)
Manufacturing
(22.1%)
Source: BIA compilations based on data from UNCTAD

7. Net FDI inflows in Canada
While FDI in Canada has grown in absolute terms,
we have lost ground in relative terms over the last decades
Canada’s share of global FDI inflows
Net FDI inflows in Canada
Billion $Can
5 years moving average
Actual flows
Source: BIA compilations based on data from UNCTAD and Statistics Canada

8. Strong inflows in Canada over the recent period stems
from large investments in the natural resources sector
Top recipients of global FDI Inflows: Cumulative FDI inflows
, US$ billion
Distribution of cumulative FDI inflows
in Canada by sectors
Canada - 7th, (total FDI)
All other sectors
- 37%
+ 37%
Energy and metallic
minerals
Canada – 21st,
(Excluding FDI in Energy and metallic minerals)
Source: BIA compilations based on data from UNCTAD and Statistics Canada

9. While the U.S. and Europe still account for the majority of FDI stock in Canada, other countries are making important gains
Share of Top 10 source countries of Canada’s Inward FDI stock in 2010
Distribution of FDI stock,
2000 and 2010, by major regions, (%)
Netherlands
(9.2%)
Others
UK (7.5%)
Switzerland (3.6%)
Europe
France (3.4%)
Japan (2.8%)
China (2.5%)
Brazil (2.4%)
United States
(54.5%)
Luxembourg (2.0%)
Germany (1.8%)
United States
Others (10.2%)
Total FDI Stock 2010: $561.6 billion
Source: BIA compilations based on data from Statistics Canada

10. Trends in
Foreign Investment
Projects

11. Greenfield/expansion investment projects up
globally but still below peak of 2008
Total number of foreign investment
projects globally
Total value of foreign investment
projects globally (US$ Billion)*
After a sharp decline in 2009, the number of investment projects worldwide increased by 2% in 2010.
Conversely, investment projects globally fell 16% in value terms in 2010.
Source: BIA compilations based on data from FDI Intelligence, Financial Times.
Note: Estimated values on August 15, 2011, for all projects.

12. Number of foreign investment projects
in Canada has increased over previous year
Total number of foreign investment
projects in Canada
Total value of foreign investment
projects in Canada (US$ billion)
Foreign investment projects in Canada rose by 20% in numerical terms and fell by 11% in value terms in 2010.
Source: BIA compilations based on data from FDI Intelligence, Financial Times.
Note: Estimated values on August 15, 2011, for all projects.

13. Recently, Canada has gained ground
in attracting foreign investment projects…
Canada’s share of foreign investment projects globally (number and value)
Source: BIA compilations based on data from FDI Intelligence, Financial Times
Note: Estimated values on August 15, 2011, for all projects.

14. DFAIT’s FDI
Results

15. Investor Attraction Funel
Greenfield projects accounted for the majority of
DFAIT-facilitated foreign investments
= Companies identified by post as being potential investors, based in part on assessments in SIIS
= Targets who have confirmed their desire and capacity to invest abroad
Prospects
Targets
Leads
= Leads who have shortlisted Canada and whose investment decision is imminent
Investor Attraction Funel FY
1260
1032
509
167
Outcome
= Greenfield Investments (104) + Expansions (41) + Acquisitions (22)
Source: DFAIT’s internal reporting system

16. Greenfield/expansion investment projects
4/16/2017
Greenfield/expansion investment projects
facilitated by DFAIT have increased over last year
In FY :
DFAIT helped attract:
145 greenfield/expansions (focus of FDI attraction program)
22 mergers and acquisitions
Impact on the Canadian economy (excluding acquisitions):
$7.1 billion investment (total for 52% of companies reporting to DFAIT or in public sources)
4,252 jobs (61% of companies reporting)
The DFAIT performance in FY was up 38% and was relatively robust given only…
2% increase in number of greenfield/expansion projects globally in 2010
4.9% increase in worldwide FDI inflows in 2010
9.4% increase in overall inward FDI flows to Canada in 2010
Number of foreign investment projects in Canada facilitated by DFAIT, by fiscal year
Source: DFAIT’s internal reporting system 16

17. All regions increased their number of DFAIT-
facilitated foreign investment projects in FY
In the past five years:
Total number of investments facilitated by region:
525 Europe (60%)
196 Asia (22%)
158 Americas (18%)
Foreign investment has risen in all regions in FY
Europe was the biggest source of investments facilitated for each of the last five years
Number of foreign investment projects in Canada facilitated by DFAIT, by region
124
119
107
104 70 67 71 43 42 28 28 26 17 18 15 *
Source: DFAIT’s internal reporting system
*Brazil accounted for 1 investment in FY
Note: Non-priority markets accounted for 5 investments in FY : Mexico (2) , Ireland (2) and Portugal (1).
Represents acquisitions

18. All investments by sector increased over last year,
except for Agrifood & Clean Technology
In FY :
DFAIT helped attract 145 greenfield investments and expansions:
Foreign investment projects in Canada (excluding acquisitions)
facilitated by DFAIT, by sector 39
Manufacturing:
Machinery equipment (11)
Aerospace & Defence (16) 30
Automotive (12)
ICT
Software (13)
Digital media (6)
Wireless communications (4)
Other (7) 24
Business, Financial & Professional Services 16
Clean Technology
Renewable-energy technologies (15)
Environmental technologies (0)
Other (1) 7
Life Sciences
Biopharmaceutical (4)
Medical devices (3)
Agrifood 6
Plastics & Chemicals
Non-priority sectors
145
TOTAL
Source: DFAIT’s internal reporting system

19. DFAIT facilitated foreign investments
were highest in Ontario and Quebec
Number of foreign investments in Canada
(excluding acquisitions) facilitated by DFAIT, by destination
Two largest provinces received the vast majority of investments in FY (78%).
Ontario’s investments increased significantly by 148% over the previous year.
Source: DFAIT’s internal reporting system
Note: No Greenfield/Expansion investments were facilitated in Prince Edward Island, Nunavut, Yukon or the Northwest Territories.

20. DFAIT’s results: key conclusions
It was a successful year for DFAIT facilitated investments, following the global economic downturn
Final results for FY indicate 145 DFAIT facilitated greenfield and expansions investment projects - an increase of 38% from the previous fiscal year.
The investment projects had a value of $7.1 billion (52% of companies reporting), compared to $1.1 billion in the previous fiscal year – an increase of $6.0 billion.
One of those projects included a German company, K+S AG, which invested $2.5 billion in Saskatoon, SK.
These projects created an estimated 4,252 jobs (61% of companies reporting), compared to 3,082 jobs the previous year – an increase of 1,170 jobs.

21. FDI Outlook According to the UNCTAD World Investment Report 2011:
Global FDI inflows rose a modest 4.9% to US $1.2 trillion in 2010, following a 32.1% decrease in However, FDI flows in 2010 were still 37% below their peak 2007 level of nearly US$ 2 trillion.
Looking forward - under an optimistic scenario - global FDI inflows are projected to rise to $1.5 trillion in 2011, $1.7 trillion in 2012 and $1.9 trillion in 2013.
Under the - increasingly probable - pessimistic scenario, global FDI inflows are projected to stagnate at around $1.2 trillion.
As indicated by FDI intelligence, FDI projects globally in 2010 increased by 2% and fell by 16% in terms of the number and value of investments, respectively. For the first half of 2011, greenfield/expansion projects were the same as the first half of last year, suggesting stagnating growth.
The economic outlook for Canada appears good, and bodes well for FDI:
The Economist Intelligence Unit continues to rank Canada as the best place to do business in the G7 over the next five years ( )
According to the IMF, Canada, along with Germany, are projected to have the fastest growth in the G7 in 2011 and 2012.