Just going to point out this is a republished Post Media article.
This is the actual report:
https://economics.td.com/ca-financial-flows-2025
This chart shows while the broad numbers is the same the underlying mechanisms of how the money gets there is different.
Ultimately I think people are taking a bit of time to substantially shift their investment portfolios/strategies. People generally tend to be a larthargic for this type of thing and taking some extra time to think of about how your life saving should would be considered prudent especially given the times. I imagine 2026 will look even more different and even when Trump’s out of the picture he’s most likely permanently pushed some money out of America.
Ultimately I think people are taking a bit of time to substantially shift their investment portfolios/strategies.
I have a meeting with my investment guy this afternoon.
The instructions I gave when scheduling the meeting were to get my investments out of the American economy as much as is possible (acknowledging that they’ve got their dirty little fingers in everything globally).
Last year I reduced my exposure to the US by about half, as he advised that the funds were already doing some amount of adjustment for risk avoidance so I shouldn’t make any “hasty decisions”.
Now I just want out. Even if it costs me a few points of growth in the short term.
Edit: meeting finished, the investment guy said I was far from his only client making the same request.
One has nothing to do with the other. Lending money is not an indication of approval. It’s an indication of trust in being repaid with interest.
And how the US is going, Canada actuality has THAT trust?
The US is speed running to a repeat of the America 1920s and Germany 1940s at the same time
Let this not be read as “we can’t even make a difference”, but rather “we obviously need to work harder.”
The US should never be underestimated in their capacity to leverage the tools they have to further their dominance. There’s chaos in their civic society and the real economy looks rough, but their markets have kept going up. They’re making aggressive moves globally to assert their power. They’re tearing international and domestic systems apart, but when it comes to capital, they can try to make everywhere else look even riskier than them, and that still pulls money their way.
Hasn’t really been working out like that. Unsustainable debt and weaponizing the dollar is creating a need for alternative currencies, banks, and payment systems. And China is stepping up. While western countries are still hesitant, majority of the world now sees China as a stable alternative to the US, and trade is increasingly being reoriented towards China as a result.
Trade and finance are different flows with overlapping but different stacks. Also, the fact that China is competing doesn’t mean the US is defeated. The US is making moves to create new dependencies and rewrite their monetary and financial systems in ways that they’re betting will suck more capital into the dollar and push it into wider use again. There’s competition now, but the US still has incredible power.
I agree, but I’d argue that material production is what matters at the end of the day, and here China is absolutely dominating. The power of the US now largely lies in media, and ephemeral stuff like technology platforms. Manufacturing is actually shrinking, and the tariff war only accelerated the process because the costs of inputs for US manufacturers went up.
The US is now trying to use its remaining military power to destroy countries aligned with BRICS, and to do land grabs like Greenland. But I really think these are just final gasps of a dying empire. The US military can’t even produce many essentials like artillery shells at scale now, and they rely on Chinese components for any advanced manufacturing. Rare earths are prime example of a critical supply chain that China has a monopoly on. Once the US runs through existing stocks, it’s not really clear how they will replace them. And without the ability to project military strength globally, the US will continue to lose grip on its hegemony.
And things aren’t looking so hot domestically for the US either. It’s basically teetering on a brink of a civil war right now. And if there is an economic crash, which is a likely scenario in the near future, that could act as a catalyst for a USSR style collapse.
This is exactly what I’d say is an example of underestimating the US. Dismissing the importance of capital markets, financial infrastructure, and software tech, while underplaying advantage in intelligence networks and military. Yes, China dominates in manufacturing and trade, and those are important, but it doesn’t eliminate the power the US has on other fronts. It’s an intense competition, and it’s possible that the US empire doesn’t come out on top. The issues you raise around manufacturing, REEs, domestic unrest are real, but they are far from settling the competition. The US is still in the lead position by far in terms of global power projection, and they are utterly ruthless. They will burn the world down if needed to rule over the ashes, and they will exploit every advantage they have over allies and adversaries alike.
Personally, I hope to see them lose their grip and to have a more balanced global system emerge, but their power is real and a collapse may be hopeful speculation but is not by any means an odds on bet at this point. It’s far from settled.
China also dominates in most technologies at this point, and in science. The US still has some power, but the reality is that it is a fading empire now. The whole retrenchment strategy is a clear admission of that. The US is no longer able to play the role of the global hegemon, and it’s now focusing on getting whatever resources it can out of Europe, and trying to consolidate control over western hemisphere.
I don’t see how the US is in the lead position in terms of global power projection. They lost their proxy war in Ukraine, which has been incredibly costly for them. They were unable to take on Yemen, and had to quietly pull back. They pulled a stunt in Venezuela, but didn’t actually manage to accomplish regime change, and did not put boots on the ground. Now they might try to start a war with Iran, and if they do that will go badly for them if they actually go through with it.
On the economic front, the US lost their trade war with China, and now countries are flocking to China seeing it as a stable alternative. The industry in the US is collapsing with each set of numbers being worse than the last. Things are so bad now that Trump admin is rushing head over hills to shut down reporting of the numbers on the economy.
I would argue that the collapse is in fact settled because it’s the material reality that matters in the end. The ephemeral things the US produces like entertainment, service industry, tech platforms, and so on, are not essential things people need to live. And they only have value when basic needs are met. At the end of the day, eople need to eat, they need goods for their every day lives, food, housing, jobs, healthcare, and retirement. The US is increasingly unable to provide these things for their population. It is no longer self sufficient in many critical areas, and it’s reliant on China to sustain basic economy. That’s precisely why the US was forced to pull back from their trade war.
It’s possible, of course, that the US starts a nuclear holocaust, but my bet is that the oligarchs will choose to rule over a diminished empire rather than live out the rest of their lives in bunkers like rats.
So is that better or worse than being a net borrower from the US?
why is this a binary choice?
A number is either positive or negative, no? Unless you manage to hit exactly 0, but I don’t think that’s possible in this scenario.
I mean we can just not invest in the Us and diversify trade. The US investment in Canada has no ditect relation to Canadian investment into US.
we can just
Implying it’s simple to get everyone to stop buying anything tied to the US, and everyone in the US to do the same with Canada.
No, I’m implying that we have to start somewhere. I’m not suggesting this is going to happen overnight. But unless Canada starts actually putting an effort into diversifying trade, then nothing will improve.
Couldn’t you also theoretically hit net 0 while having 100% of our trades going through the US? I don’t know what the “lender” part of “net lender” means, so I could be wrong here, but it seems like this isn’t the right metric to look at if what you care about is trade diversification.
Basically, the report from TD highlights a paradox in Canada’s economic relationship with the US. Being a net lender simply means we’re sending more capital south than we’re receiving.
Canadian money poured into US assets at a record pace in 2025, driven almost entirely by portfolio investment such as stocks and bonds. Investors were chasing higher US interest rates and a strong tech sector, even though the report notes Canadian equities actually had better returns. This is classic hot money flow, and it shows how deeply our financial markets are linked right now.
However, FDI numbers appear to be collapsing with investment from Canadian companies directly in U.S. businesses being at 2009 low. The report suggests trade uncertainty and tariff environment make businesses hesitant to commit long-term capital to projects down south.
The good news is that the data in the report suggests we might starting to diversify. While American FDI into Canada slowed, investment from other countries actually rose, and Canadian investment into other countries also jumped significantly. New trade talks with India and China will likely help the process along as well.
The takeaway for me is that our financial portfolios are still wedded to Wall Street, but our corporate investment strategy is starting to look elsewhere.
I mean, it’s trinary. They lend more to us, we lend more to them or it’s totally even.
It’s just not clear what bigger picture thing to take away from this fact, I guess.
There’s zero connection between these two things.
:(
