Investors are fleeing Canada. Canada experienced a historic capital exodus between 2015 and 2024, with over $1 trillion in net investment leaving the country, though recent government summits and policy changes aim to reverse the trend.
That’s not quite the whole story, though.
You’re right; from 2015 to 2024 Canada was losing inward investment.
Two large German car manufacturers were being schmoozed by the USA for the last seven or so years, Canada too, and that pre-2025 climate was always the problem for Canada.
I’m talking about Audi and Volkswagen.
The USA literally had the best arguments. So, deals were in the works between the German companies and the USA.
Then along came Trump’s three-way tariffs against the EU, Mexico, and Canada. Trump’s favorite word, tariffs! Ignoring literally every lesson from history, about what actually happens if a country *abuses* tariffs.
Trump literally sabotaged his own stated aim of inducing said companies to grow their presence in the USA, by punishing the companies he was trying to woo.
The cost to Audi and Volkswagen of doing the deals with the USA skyrocketed, and the ambition of creating jobs and growing the market in the USA was outweighed by the risks. In effect they were going to end up millions (if not billions) out of profit UP FRONT while building the capacity in the USA, at the same time that tariffs would create inflation across the USA making high-end expensive German brand cars a lot harder to sell.
Punishing the companies that you want to invest, and creating an inflation pressure that’d suppress the buyer market, at the same time, was literally the antithesis of “art of the deal”.
A great deal is one where both sides are getting a benefit from the deal. A crap deal is where both sides end up saddled with big headaches. Trump’s tariff obsession turned a no-brainer into a turd sandwich. The only person who would’ve benefited if the deal had gone ahead would’ve been the negotiator - who could brag about how he got the signatures on paper even if everyone else thinks the deal is a total turd sandwich.
To paraphrase one commentator, the switch from USA to Canada, from the VW perspective, wasn’t even a question of diplomacy or politics, it was basic arithmetic.
Trump’s aggressive tariffs meant the math simply didn’t work in the USA’s favor. Carney, not Trump, mastered the “art of the deal” by making the math around switching to Ontario look fantastic by comparison.
So, instead of massively boosting its American production base, Volkswagen has committed $7 billion to build a massive gigafactory - an electric vehicle battery plant through its subsidiary PowerCo in St. Thomas, Ontario.
Art of the Deal. Carney’s got it, Trump’s lost it.