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BMO Waiting For Update on Foreign Direct Investment Flows on Thursday

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An aspect of Canada's Q1 current account data to be released on Thursday that Bank of Montreal (BMO) will be looking at closely is foreign direct investment (FDI) flows.

A bit of an underplayed story is that Canada has finally seen some net inflows of FDI, said the bank. For 2025, there was a surplus of $17 billion, snapping an 11-year streak of outflows, and only the second annual net inflow in the past 18 years, it noted

That's the good news, BMO added.

But the less friendly news relates to how that net inflow was generated, said the bank, noting there are three components of FDI: reinvested earnings, greenfield investments, and mergers and acquisitions (M&A).

This is a source of some debate, BMO noted. But BMO suggests that M&A is the least helpful to future growth prospects and the bulk of the Canadian turnaround has been driven by increased M&A activity.

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