On This Page You Will Find
- Why Canada ranked second for foreign investment
- What global investors see in Canada’s economy
- How Canada compares with the United States and Asia
- The growing role of AI and technology investment
- Why political stability matters to investors
- What the rankings mean for Canada’s economy and immigration
Canada has once again been ranked as one of the world’s most trusted destinations for foreign investment, placing second globally in the 2026 Kearney Foreign Direct Investment Confidence Index.
The ranking puts Canada behind only the United States and ahead of major economies including Japan, China, Germany and the United Kingdom.
It marks the fourth consecutive year Canada has held second place in the annual global ranking, which measures where international business leaders are most likely to invest over the next three years.
The report suggests investors continue to see Canada as a stable, reliable and innovation-driven economy at a time of growing geopolitical tension and economic uncertainty worldwide.
Canada Closing The Gap On The United States
Kearney said Canada’s overall investment confidence score rose in 2026 while the United States saw its score decline.
Although the United States retained first place for the 14th consecutive year, investor optimism weakened significantly because of political uncertainty and concerns linked to tariffs and economic instability.
Canada, by contrast, strengthened its position.
The report said Canada’s appeal is built on a combination of:
- Strong natural resources
- Stable economic fundamentals
- Technological innovation
- Predictable institutions
- Infrastructure investment
- AI-related growth opportunities
Kearney described Canada as “closing the gap” with the United States in terms of investment confidence.
Investors Bullish On Canada’s Resources And Technology
Global investors pointed to Canada’s natural resources as the biggest factor attracting foreign investment.
According to the report, 28 per cent of investors identified natural resources as Canada’s main strength.
Canada’s energy sector remains a major driver. The report highlighted record production levels by Canadian Natural Resources in 2025, supported by acquisitions and strong operational performance.
But the report also showed that Canada is increasingly being viewed as a technology and innovation hub.
Another 28 per cent of investors cited technological innovation as a key reason to invest in Canada.
That reflects growing international interest in Canada’s artificial intelligence sector and digital infrastructure.
The report referenced the federal government’s 2025 budget proposal to invest nearly $926 million in “sovereign public AI infrastructure.”
Canada Among The World’s Most Optimistic Economies
Canada also ranked among the world’s most optimistic investment destinations.
The country recorded a net optimism score of 39 per cent for its three-year economic outlook, placing it behind only the United Arab Emirates and Japan.
The report said investors increasingly favour “middle powers” like Canada because they are viewed as stable, predictable and relatively neutral in an increasingly fragmented geopolitical environment.
That trend has helped countries such as Canada, Singapore and Saudi Arabia climb global investment rankings.
AI And Innovation Now Drive Global Investment Decisions
One of the biggest findings in the report was the growing importance of technology in global investment decisions.
For the first time, technological and innovation capabilities ranked as the most important factor for foreign direct investment decisions.
That pushed traditional considerations such as economic performance and regulatory efficiency slightly lower.
The report linked this trend directly to the global boom in artificial intelligence and digital infrastructure investment.
Foreign investment in data centres exceeded an estimated $270 billion globally in 2025, according to figures cited in the report.
Countries with strong innovation ecosystems are increasingly viewed as the safest long-term investment destinations.
Canada appears to be benefiting from that shift.
Canada is also reshaping its entrepreneur immigration strategy to focus more heavily on high-impact investment and innovation.
The federal government paused the Start-Up Visa Program to new applications on January 1, 2026 and is now developing a replacement entrepreneur pathway aimed at attracting founders with stronger economic potential and clearer growth prospects.
Immigration, Refugees and Citizenship Canada has signalled the new model will place greater emphasis on measurable economic outcomes, innovation and scalability.
Political Stability Becoming More Important
The report said rising geopolitical tensions are now one of the biggest concerns for global investors.
Business leaders identified:
- Geopolitical conflict
- Political instability
- Commodity price increases
- Trade fragmentation
- Industrial policy uncertainty
as major risks for the global economy over the next year.
Against that backdrop, Canada’s political stability and institutional reliability appear to be major competitive advantages.
Investors continue to view Canada as a low-risk environment with strong legal systems, transparent regulations and relatively stable public institutions.
Asia Gains Ground In Global Investment Rankings
While Canada maintained second place, the broader rankings showed a major global shift.
For the first time in 13 years, Asian economies occupied the largest share of top-ranked investment destinations.
Japan climbed to third place, while China rose to fourth.
Singapore made one of the biggest jumps, moving from 15th to eighth place.
The report said many investors are increasingly diversifying beyond traditional Western economies and looking toward fast-growing “middle powers” in Asia and elsewhere.
Still, Canada remains one of the few Western economies to consistently maintain strong investor confidence.
What This Means For Canada
The rankings reinforce Canada’s reputation as one of the world’s safest and most attractive places for long-term investment.
Foreign direct investment is important because it can support:
- Job creation
- Infrastructure development
- Technology growth
- Manufacturing expansion
- Housing construction
- Energy projects
Strong investment confidence can also support immigration goals by creating more demand for skilled workers and professionals.
Canada has increasingly linked immigration policy to labour shortages and economic growth strategies, particularly in sectors such as technology, infrastructure, engineering and skilled trades.
The report suggests global investors still see Canada as well-positioned despite economic uncertainty affecting many advanced economies.
Industrial Policy Becoming More Important
Another major theme in the report was the rise of industrial policy.
Kearney found that 84 per cent of investors now consider industrial policy either “very” or “extremely” important when making investment decisions.
Investors viewed infrastructure spending, tax incentives and subsidies as the most effective tools governments can use to attract investment.
Canada was highlighted as a country actively investing in infrastructure and industrial development.
The report referenced the Building Canada Act and large provincial infrastructure initiatives aimed at supporting long-term economic growth.
Canada’s Long-Term Advantage
The report ultimately paints Canada as a country benefiting from several global trends at once.
Investors increasingly want:
- Political stability
- Strong institutions
- AI capability
- Reliable infrastructure
- Access to resources
- Skilled labour
- Predictable regulations
Canada scores well across nearly all of those categories.
While competition for global investment is intensifying, particularly from Asia and the Gulf region, Canada continues to stand out as one of the world’s most trusted investment destinations.
Frequently Asked Questions
Why did Canada rank second for foreign investment confidence in 2026?
Canada ranked second because investors continue to view it as politically stable, economically reliable and technologically innovative. The report highlighted Canada’s natural resources, AI investments, infrastructure spending and strong institutions as major strengths that attract foreign direct investment.
What is the Kearney Foreign Direct Investment Confidence Index?
The Kearney FDI Confidence Index is an annual global survey of senior business executives. It measures which countries investors are most likely to target for foreign direct investment over the next three years. The 2026 edition surveyed more than 500 executives from major international corporations.
Why are investors increasingly focused on AI and technology?
The report found technological innovation is now the most important factor in investment decisions worldwide. Investors are directing major capital toward artificial intelligence, data centres and digital infrastructure, making countries with strong innovation ecosystems more attractive for long-term growth.
How does Canada compare with the United States?
The United States remained number one globally, but investor optimism declined because of political uncertainty and tariff concerns. Canada narrowed the gap thanks to its stable economy, strong resource sector and growing reputation as a technology and AI investment destination.
What does this mean for Canada’s economy and immigration?
Strong foreign investment confidence can help create jobs, support infrastructure and drive economic growth. It can also increase demand for skilled immigrants in sectors such as technology, engineering, construction, manufacturing and skilled trades as companies expand operations in Canada.
