Canada’s anger toward the U.S. over tense trade relations has hurt summer tourism and sparked consumer boycotts, but it hasn’t stopped Canadians from investing in U.S. markets.
From January to May this year, Canadian investors poured $59.9 billion CAD ($43.3 billion USD) into U.S. debt and stocks, according to the National Bank of Canada Financial Markets. This is the highest amount for this period since at least 1990. Meanwhile, investment in Canadian securities by foreign investors dropped by $18 billion CAD ($13 billion USD) during the same period.
“‘Buy Canadian’ programs don’t seem to apply to investment portfolios, as Canadian investors have instead loaded up on U.S.-issued securities at an entirely unprecedented pace,” Warren Lovely, managing director of National Bank Financial, wrote in a report last month. “Meanwhile, foreign investors have cooled on Canada.”
Canadians’ interest in American stocks comes even as U.S. markets perform well despite concerns about tariffs, a cooling job market, and an AI bubble. Ironically, Canadian stocks are actually doing better than American ones, according to Morningstar data, likely because Canadian companies started the year at lower valuations.
While Canadian stock growth might encourage more investment from Canadians, the size of the U.S. market makes it hard to resist.
“Canadians continue to invest in the United States because Canada is a relatively small market, and any fully diversified approach to investing requires allocations to the U.S. market,” said Brett House, a professional practice professor at Columbia Business School and fellow with Canada’s Public Policy Forum, speaking to Fortune.
Why has ‘Buy Canadian’ stopped at stocks?
Moshe Lander, a former senior economist for the Government of Alberta and a senior lecturer at Concordia University in Montreal, says Canadians treat boycotting U.S. goods differently from investing in U.S. companies.
“The U.S. boycott is an emotional thing, not an economic thing,” Lander told Fortune. “Many Canadians have realized there’s a limit to how far they’re willing to show their objections.”
Avoiding American products can make Canadians feel empowered in daily life, Lander said, but skipping U.S. stocks doesn’t make sense for practical investment reasons. Another factor is that most Canadians rely on financial advisors to manage their portfolios. These advisors focus on returns, not emotion-based boycotts.
“When I go to the grocery store, I can choose not to buy an American product,” Lander said. “But when I talk to my financial advisor, I’m not telling them to avoid Apple, Microsoft, or Walmart.”
Limits of the ‘Buy Canadian’ movement
Boycotts have still made a noticeable impact. In late March, Air Canada reported a 10% drop in bookings to U.S. cities compared to previous years. Sales of U.S. spirits in Canada also fell 66.3% between early March and the end of April, according to Spirits Canada, as some retailers stopped selling American alcohol.
“It’s been an effective way for Canadians to show they’re upset with the insults the Trump administration has directed at both the Canadian government and the Canadian people,” said Brett House.
However, Lander predicts the “Buy Canadian” movement will fade, because it isn’t sustainable for Canada’s economy. Canada imports and exports about $500 billion each year. Aggressively boycotting U.S. goods wouldn’t hurt the nearly $30 trillion U.S. economy much, but it would take a significant toll on Canada’s $2 trillion economy.
“I don’t know that it’s the continued purchase of U.S. equities or bonds that’s unusual,” Lander said. “It’s more that the boycott of American goods and tourism has actually lasted for seven months.”
