The growth, productivity and profits of Canadian firms involved in global markets has been superior to the performance of domestically-oriented firms . The higher profits enjoyed by the Canadian firms that invest in foreign markets has been attributed to their increased efficiency. In part, this is due to their ability to exploit economies of scale and scope. The growth of Canadian investment abroad leads to an increase in exports, which directly affect Canada's economic health. Exports account for more than one third of our Gross Domestic Product.
Exports are the path to future growth and continued competitiveness in the global marketplace.
Investment abroad offers better access to foreign skills and foreign technologies for the Canadian high-technology industries . It also increases research and development in Canada, which in turn leads to innovation, expanded market potential, and better employment opportunities for highly-educated workers. The spill over effect can benefit companies that are not themselves investing abroad. They may directly or indirectly benefit from the introduction of new skills, management techniques and technology acquired by Canadian firms that have already moved into foreign markets. Clearly, foreign investment is critical to Canada's future linking Canadian companies, consumers and workers to the new knowledge based global economy.