The latest tally of

international securities transactions

is out this week, and it’s not a pretty picture for Canada.

Foreign investors added $709 million in Canadian securities in June, the first investment since January, and while that might seem like good news, National Bank of Canada economist Warren Lovely says Canadians should hold their applause.

The “slight” June investment reversed just a fraction of the divestment that has been accumulating since the beginning of the year.

“Since President Trump moved back into the White House and clouds formed over many an outlook, non-residents have cooled on Canadian exposure,” he wrote in a note on the data. “Never has the first half of a calendar year produced such tepid foreign interest.”

 

Foreign investors bought $6.9 billion in

Canadian bonds

in June, down from $9.7 billion in May. Corporate bond purchases led the way, followed by provincial government bonds. There was a $1.3 billion reduction in foreign holdings of federal government bonds.

But they dumped equities. Foreign investors reduced their exposure to

Canadian shares

by $3 billion in June, following a divestment of $11.5 billion in May. Most of this was in the

banking sector

and trade and transportation industries.

Meanwhile, Canadians acquired $9 billion in foreign securities, most of it in U.S. stocks and non-U.S. bonds. This resulted in a $8.3 billion outflow from the Canadian economy in the month and brought the total exit for the second quarter to $43.7 billion, said Statistics Canada. There was a similar outflow in the first quarter.

“With nonresident investors aloof and Canadians adding foreign assets, the country has suffered a major capital drain. The cumulative outflow over the latest five-month period is in fact unprecedented,” said Lovely.

The economist said Canada’s bond market especially needs scrutiny, considering the heightened borrowing needs of the federal government in the days to come.

In 2024, foreign buying soaked up almost 75 per cent of net Government of Canada debt issuance, but that share dropped dramatically in the first half of this year.

Domestic investors were left to pick up the slack, acquiring $100 billion of net GoC supply in the first half, said National. Annualized, that’s 6 per cent of GDP and doesn’t include the funding needs of non-central governments, public sector entities and private corporations.

“If sustained, foreign investor apathy could be problematic if not downright frightful,” said Lovely.

If Ottawa wants to avoid a worse scenario, clarity on its budget and a timely trade deal would help, he said.

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China Customs,

according to a recent report

, cites gold — not canola or coal — as its No. 1 import from Canada by value, and today’s chart shows how the yellow metal has become a bigger player in the nation’s trade. Gold and other precious metals are now more than 6 per cent of Canadian exports, double the share two years ago, said Douglas Porter, chief economist of BMO Capital Markets.

That puts precious metals in line with forestry products such as lumber and pulp & paper, which has long topped Canadian trade, and farm and fishing.

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  • Federal Agriculture Minister Heath MacDonald and Saskatchewan Premier Scott Moe will hold a press conference this afternoon after meeting about Chinese tariffs of 75.8 per cent on Canadian canola
  • Today’s Data: Canada industrial product and raw materials price indices, United States existing home sales
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Buying a house is the largest purchase most Canadians will ever make and finally paying off the mortgage is likely to be a game changer.

But before the temptation to splurge on a pricey new car or a luxury vacation takes hold, experts say it’s important to review your financial plan for this next chapter to ensure you’re on track for wherever you want to go.

Find out how

to make the most of your newfound cashflow.

Are you worried about having enough for retirement? Do you need to adjust your portfolio? Are you starting out or making a change and wondering how to build wealth? Are you trying to make ends meet? Drop us a line at wealth@postmedia.com with your contact info and the gist of your problem and we’ll find some experts to help you out while writing a Family Finance story about it (we’ll keep your name out of it, of course).

McLister on mortgages

Want to learn more about mortgages? Mortgage strategist Robert McLister’s

Financial Post column

can help navigate the complex sector, from the latest trends to financing opportunities you won’t want to miss. Plus check his

mortgage rate page

for Canada’s lowest national mortgage rates, updated daily.

Financial Post on YouTube

Visit the Financial Post’s

YouTube channel

for interviews with Canada’s leading experts in business, economics, housing, the energy sector and more.

Today’s Posthaste was written by Pamela Heaven with additional reporting from Financial Post staff, The Canadian Press and Bloomberg.

Have a story idea, pitch, embargoed report, or a suggestion for this newsletter? Email us at 

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