Kevin O'Leary: Direct investment in Canada is collapsing, and fast
Kevin O’Leary is sounding the alarm about the decline of foreign investment into Canada.
“Direct investment in Canada is collapsing,” O’Leary, founder of O’Leary Financial Group told BNN in an interview on Wednesday. “It’s not going down a few per cent, it’s down 53 per cent. And, that means this is not a choice for either Canadian or international investors.”
Non-residents bought $5.68 billion in Canadian securities in January, according to figures released on Mar. 19. That marked a sharp decline from the monthly average of $18.4 billion seen between July and November of 2017.
“The big surprise is how fast it’s happening,” O’Leary said. “It’s really, really accelerating and I think this should be a bi-partisan discussion with Canadian politicians.”
“What do we have to do to be competitive? We don’t need the lowest tax rates. There’s a lot of merits Canada has that no other country has. We need competitive tax rates and competitive policy.”
O’Leary’s comments echo the sentiments of former Deputy Prime Minister John Manley, who said the decline is symptomatic of a far larger trend that needs to be addressed by the Trudeau government.
“We’ve been seeing the trend down in investment in Canada ever since the crash of oil prices a few years ago,” Manley told BNN in a Mar. 15 interview. “So, I don’t think that they can afford to look at the snapshot of today’s economy, which is what they’ve tended to do – which actually looks quite good – and say: ‘We can project from here on out into the future and everything’s going to be rosy.'”
However, unlike Manley – who cited U.S. tax reform as a key factor scaring off foreign investors – O’Leary thinks the carbon tax is making Canada a less desirable place for the world to park its cash.
“Another problem for us? That carbon tax... Nobody has it,” O’Leary said. “You don’t put money here when you’re getting whacked with a tax no one else has.”
And O’Leary thinks the problem is worsening to the point where it’s going to start being felt by the average Canadian.
“These matters don’t matter to the average Canadian until it affects their job,” O’Leary said. “What I’m suggesting is the rate of loss of capital is accelerating.”
“You can ignore it until you can’t ignore it.”