OTN BARBADOS OFFICE

1st Floor, Speeedbird House, Bridgetown n BB11121,

R 31000.3/6-22010-07-18
Ref: Tel: (246
BARBADOS
6) 430‐1670 Fax: (246) 228
8‐9528
Emaiil: barbados.office@crnm..org

OTN JAMAICA OFFICE

2ND Floor, PCJ Building, Kingsto
on 5,
JAMAICA
6) 908‐4242 Fax: (876) 754
Tel: (876 4‐2998
Emaail: jamaica.office@crnm.oorg

Trad
T de Brie
B ef
CA
ARICOM
M-Cana
ada Inve
estmen
nt Overrview

Globaal and Regionall Context

The purpose of this brieef is to provide Meember States withh a quick referencce on the investm ment performancee between CARIC COM
and Caanada which cann hopefully assisst with any natioonal consultationss on possible innvestment provisions in a Trade and
Development Agreemennt (TADA). For those CARICOM Member M States inntent on attractingg FDI from countrries including Cannada,
the globbal situation is moore competitive ass the pool of globbal funds is not proojected to expandd until next year. Global
G FDI flows have
been seeverely affected worldwide
w by the economic
e and financial crisis.

Inflows were expected tot fall from $1.7 trillion

t to below $1.2
$ trillion in 20009, with a slow reecovery in 2010 (to a level up to $1.4
trillion) and gaining mom
mentum in 2011 (approaching $1..8 trillion). In 2008, FDI inflows weere uneven amonng the sub regionns of
Latin America and the Caribbean:
C it was up
u by 29% in Souuth America and down
d by 6% in Ceentral America annd the Caribbean.

Figure 1: Canadian inwaard and Outward FDI Stock (CDN$$mn)

Source: CANSIM Databasee. Retrieved from www.statcan.gc.ca

w J 15, 2010
July

Canadaa continues to bee a leading global investor as up too 2009, Canada exported
e CDN$5993.3 bn in FDI Stoock. Canada is also a
dynamiic global investorr as between 19887 and 2009, thee stock of overseaas FDI expandedd by 9.9% per annnum. Canada was w a

CA
ARICOM
M-Canada
a Trade and Dev
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major global
g recipient off FDI attracting CDN$549.4 bn FD DI stock as at 20009. Canada was also a dynamic global
g recipient off FDI
with thee inward stock of FDI increasing byy 7.7% annually between
b 1987 andd 2009 (see figuree 1).

CARIC
COM-Canada In
nvestment Perf
rformance

CARICOM continues to be an important destination for Caanadian FDI stocck, attracting almoost 10% of Canadda’s total outwardd FDI
stock as
a at 2009. Howevver, this outturn wasw not reciprocaal, as CARICOM Investors found a home in Canadaa for CDN$470 mn m of
FDI stoocks up to 2009 which
w representeed the lowest outtturn since 2003 (see figure 2). Thhis signals that CARICOM
C Investm
ment
strategyy may not be addequately successsful in presentingg the region as a springboard intoo Canada for extternal parties, utillising
strategiic locational advaantages includingg market access and investor prootection. This investment performance with CARIC COM
being a net importer of capital
c in a comppetitive global envvironment sets thee context for neggotiations of a Traade and Developmment
Agreemment between CA ARICOM and Cannada.

Figure 2: CARICOM-Caanada Investmen

nt Performance (CDN$mn)

Source: CANSIM Databasee. Retrieved from www.statcan.gc.ca

w J 15, 2010
July

As at thhe end of 2009, thhe Member Statess attracting new innvestment (FDI stock)
s from Canadda were:

• The Bahamas (CDN$ 11.7bn);

• Barbados (CDDN$40.8bn); and
• Trinidad & Tobbago (CDN$2.3bbn).

Howeveer, cumulatively, between 1987 and 2009, the Meember States attraacting FDI stock included the threee aforementioneed as
well ass Jamaica and Guyana.
G Two of thhe leading host countries in CAR RICOM for Canaddian investment are those with which
w
Canadaa has negotiateed Bilateral Invesstment Treaties(BITS), specifically, Trinidad and Tobago and Baarbados. Additionnally,
Canadaa has negotiated double taxation avoidance
a treatiess with Barbados (1980), Jamaica (1978) and Trinidaad & Tobago (19995).

The Caanadian statisticaal authority (STAT TCAN) does not have a record betweenb 1987 annd 2009 of FDI stocks
s in Antiguaa and
Barbudda; St. Kitts and Nevis; Dominicaa; Haiti; Grenadaa; Belize and Suuriname. Therefoore, CARICOM LDCs L may be haaving
difficultyy attracting Canaadian investmentss, and the negotiiations of the TAADA could providee a timely opporttunity for the LDC Cs to
signal their
t capacity to attract
a Canadian investment.
i Addittionally, Canada maym be investingg in CARICOM inddirectly, through other
o
third coountries, and as such,
s the data may reflect the couuntry of origin of the investment fuunds, rather thann the nationality of
o the
investor. Member Statess are invited to suubmit any more detailed
d data theyy may have at theeir disposal on Caanadian investmeent in
their terrritories. The Memmber States that were
w more dynam mic at attracting FDI
F from Canada were again The BahamasB (9% grrowth
per annnum between 19887 and 2009); Barrbados (22% grow wth per annum) and a Trinidad and Tobago
T (18% groowth p.a.).

CARICOM
C M-Canada
a Trade and Dev
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Interestingly, the Region’s private sector can seek to utilise the provisions of the TADA strategically in two ways: firstly hosting
Canadian investors interested in Joint ventures, or acquiring highly leveraged assets in sectors such as those listed in the following
section; and secondly, attracting export-oriented investments from Europe and Latin America.

Canada Sectoral Investment Performance

Up to 2009, over 40% of Canada’s Outward FDI stock was invested in the finance and insurance sector. Other dominant sectors
include Mining and Oils and Gas extraction (15% of Outward FDI stock), and Management of companies and enterprises (10.3%
of outward FDI stocks).

Interestingly however, the fastest sectors for Canadian outward FDI stock included many sectors of interest to CARICOM, and
these sectors could be liberalised within the TADA framework. Between 1999 and 2009, the most dynamic sectors for Canadian
Outward FDI included:

• Furniture and related product manufacturing (29% growth in outward FDI per annum);
• Utilities (23.3% growth p.a.);
• Support activities for mining and oil and gas extraction (20.2% growth p.a.);
• Agriculture, forestry, fishing and hunting (17.6% growth p.a.);
• Clothing manufacturing (23.5% growth p.a.);
• Food manufacturing (8.2% growth p.a.); and
• Chemical manufacturing (11% growth p.a.).

Up to 2009, the major sectors in which Canada has been hosting FDI included: Oil and gas extraction; primary metals production;
wholesale trade; finance and insurance; petroleum and coal products manufacturing; management of companies and enterprises;
and chemical manufacturing. Sectors that Canada has been contracting its FDI stock between 1999 and 2009 included textile
product mills; paper manufacturing; computer and electronics manufacturing; and real estate. These areas could prove to be
difficult for CARICOM investors to penetrate in the Canadian market.

This examination of the sectors in which Canada is investing internationally is important to inform the sector interests in the
negotiation of the CARICOM-Canada TADA. For example, CARICOM Member States could seek to encourage investments in
the furniture industry by liberalising that industry to Canadian investors in the negotiations of the TADA. Canada is retreating from
international investment in sectors including construction; plastics and rubber products manufacturing; and Information and
communication technologies (ICT), as there was significant contraction in outward FDI stock between 1999 and 2009. Based on
the foregoing, these sectors may prove difficult to attract investors from Canada into the region.

CARICOM-Canada Trade and Development Agreement