Net inflows hit $58.3bn as Canadians pull back from US Treasuries amid shifting allocations
International appetite for Canadian government debt reached new heights in April, with non-resident investors snapping up federal bonds at a pace not seen before.
Foreign investors added $46.9 billion in Canadian securities to their portfolios during the month, Statistics Canada reported, pushing total holdings accumulated since January to $104.0 billion. At the same time, Canadian investors trimmed their foreign holdings by $11.4 billion, marking their first net sale abroad since October 2025 and breaking a run of five straight months of buying that had totalled $70.3 billion.
The combined effect of foreign buying and domestic selling produced a net capital inflow of $58.3 billion into the Canadian economy for the month, the largest such inflow recorded since October last year.
Government bonds were the standout draw for overseas buyers. Non-residents picked up $38.5 billion worth of Canadian government bonds in April, a figure StatCan described as unprecedented.
Within that total, federal government bonds alone accounted for $27.7 billion, also a record, bringing year-to-date foreign investment in federal debt to $47.8 billion. American buyers led the charge, though the agency noted that demand from investors in Asia and Europe also picked up over the month.
Provincial bonds saw renewed interest too, with foreign investors adding $10.6 billion, their biggest provincial bond purchase since January 2025. Corporate bonds attracted a further $10.2 billion in foreign money, with paper issued by financial institutions drawing the most demand. Overall bond purchases by non-residents reached $48.6 billion for the month.
That strength in fixed income was partially offset elsewhere.
Foreign holders pulled $7.4 billion out of Canadian money market instruments in April, extending a divestment streak that now totals $21.2 billion since the start of 2026. The retreat was concentrated in private corporate paper, though some of that outflow was cushioned by purchases of federal government paper.
Equities gain
After two months of foreign selling, non-resident investors returned to Canadian shares with $5.6 billion in net purchases, most of it directed at energy and mining names through secondary market trades. The S&P/TSX composite index climbed 3.7% over the same period.
On the domestic side, Canadian investors scaled back their foreign exposure across both bonds and equities.
Foreign bond holdings fell by $8.4 billion, split between a $5.9 billion reduction in non-US bonds and a $3.0 billion pullback from US government debt. That US Treasury retreat is notable against the backdrop of the year so far: Canadian investors have now shed $20.8 billion in US government bonds between January and April, a sharp reversal from the $19.6 billion they added over the same stretch in 2025.
Canadian holdings of foreign equities dropped by $3.0 billion in April as well.
Despite continued gains in US share prices, as tracked by the S&P 500, Canadian investors sold $1.6 billion of US stocks, concentrated in large-cap technology names, while also shedding $1.4 billion in non-US shares, mostly European holdings.
