$1-Trillion Investment Target Risks Eroding Economic Sovereignty

The Canadian government's goal to attract $1-trillion in investment over five years has sparked concerns about prioritizing volume over quality. The Canada Investment Summit, led by Prime Minister Mark Carney, aims to bring in foreign capital, but critics argue that this focus may lead to the erosion of economic sovereignty.

One concern is that not all investments are created equal. While some build new capacity and create jobs, others merely transfer ownership from one balance sheet to another. The government's emphasis on investment volume could result in selling off productive assets for short-term gains, compromising long-term growth.

The Prime Minister highlighted a surge in foreign investment in 2025 as evidence of the economy's strength, but nearly half of this investment came from acquisitions of existing Canadian businesses. Much of this acquisitive investment was debt-funded, such as the sale of Parkland to U.S.-based Sunoco, which used US$2.65-billion in debt to finance the transaction.

The trend of acquisition-driven investment is evident across various sectors, including veterinary care, disaster restoration, and pharmacies. This has led to consolidation, price increases, and a decline in service quality. As foreign investors focus on small- and medium-sized businesses, many acquisitions go unreported, avoiding scrutiny under the Investment Canada Act.

The federal government's plans to open Canada's four largest airports to private investors raise concerns about prioritizing investment volume over productive capital formation. The track records of major investors like BlackRock and Blackstone suggest a preference for buying rather than building. The Canadian Venture Capital and Private Equity Association has taken note, holding their own conference at the same time as the Canada Investment Summit.

The association's goal is to showcase mid-market firms for acquisition by the same major investors the federal government will be courting. This should raise alarms for Canadians concerned about economic sovereignty, particularly given that foreign ownership in Canada's economy already stands at worrying levels. As of 2023, nearly a quarter of assets in non-financial corporations were foreign-controlled.