Canadians made an unprecedented exit from US equities in July while international appetite for Canadian government debt reached new heights, Statistics Canada data shows
Canadian investors sold a record $31.0 billion worth of US shares in July 2026, reversing course after pouring $78.1 billion into those same markets in the first half of the year, according to new data from Statistics Canada.
The divestment is the largest single-month sale of US equities on record and was concentrated in large-capitalisation technology shares and coincided with a modest retreat in the S&P 500 composite index following a period of strong gains earlier in 2026.
The reversal marks a significant shift in sentiment for Canadian investors, who had been buying US equities at a pace not seen in decades through much of the year.
The broader pullback from foreign securities totalled $30.6 billion for the month, with US government bonds also seeing a reduction of $5.1 billion - the sixth consecutive monthly divestment in that category, bringing the year-to-date total to $37.3 billion. Partial offsets came from purchases of US corporate bonds ($1.8 billion) and non-US foreign bonds ($3.3 billion), though these were insufficient to change the overall direction of the flow.
Foreign demand for Canadian debt continues to surge
On the inbound side, the data from Statistics Canada paints a different picture. Foreign investors added $20.7 billion of Canadian securities in July, lifting total non-resident investment since January to $178.9 billion.
Federal government bonds remained the primary draw, attracting $22.7 billion in foreign purchases during the month alone. Over the first seven months of 2026, foreign investment in federal government bonds reached an unprecedented $104.0 billion - compared with just $13.8 billion during the same period in 2025. As a result, the share of total outstanding federal government bonds held by non-resident investors climbed from 40.2 per cent to 46.5 per cent between January and July 2026.
That momentum has been building steadily. Foreign investors poured $40.8 billion into Canadian securities in June 2026 capping an extraordinary second quarter driven by demand for federal debt, and the July figures suggest that appetite remains intact.
The scale of bond-buying in 2026 represents a structural shift rather than a short-term position. Earlier in the year, foreign investors poured record sums into Canadian government bonds in April, with US, Asian, and European buyers all contributing to what Statistics Canada described as record monthly acquisitions of both federal and provincial government bonds.
Energy and mining attract overseas equity buyers
Foreign investors also increased their Canadian equity holdings in July, acquiring $7.2 billion - the largest monthly investment of 2026 in that asset class. Energy and mining shares accounted for the bulk of that activity, with $7.8 billion flowing into the sector. The S&P/TSX composite index rose 1.1 per cent over the same period.
That equity buying was partially offset by a $11.9 billion reduction in Canadian money market instruments, with non-resident investors pulling back from private corporate paper ($7.6 billion) and federal government paper ($3.2 billion).
Net inflow reaches $51.3 billion
Taken together, international transactions in securities generated a net inflow of $51.3 billion into the Canadian economy in July 2026 - a figure that underscores the sustained international confidence in Canadian fixed income, even as domestic investors scaled back their exposure abroad.
For financial advisors, the data raises questions about portfolio positioning heading into the second half of the year. The simultaneous retreat from US technology shares and the continued surge in foreign demand for Canadian federal debt point to shifting risk appetites across global markets.
Whether Canadian investors who sold in July will return to US equities - or redirect capital toward domestic opportunities - will be a key dynamic to watch as the year draws to a close.
Statistics Canada will release data on Canada's international transactions in securities for August 2026 on October 16.
