Canadian direct investment abroad rose by 24% in 2008, the strongest growth in Canadian direct investment abroad since 1981, Statistics Canada said Wednesday.

The increase largely the result of the substantially weaker Canadian dollar’s effect in the fourth quarter of 2008 on the value of foreign currency-denominated direct investment positions, StatsCan said.

The depreciation of the Canadian dollar against most foreign currencies added $82.8 billion to the overall Canadian direct investment position abroad.

In 2008, the loonie lost 19% against the US dollar after reaching parity at the end of 2007. It also depreciated by 15% against the euro and 34% against the Japanese yen, but gained about 11% on the British pound, StatsCan said.

Most of the gains in 2008 were accounted for by changes in the value of investments in the United States, as the direct investment position grew to $310.7 billion. Nevertheless, Canadian direct investments at the end of 2008 were spread over countries on all continents, with 39 countries having at least $1 billion in investment.

Foreign direct investment in Canada grew by 3% in 2008. This was well below the average annual growth of 9% over the last decade, and reflected considerably slower investment activity in the year, especially from the U.S., StatsCan said.

Foreign direct investment in Canada was more concentrated, with 22 countries having more than $1 billion in direct investment in Canada at the end of 2008.

IE