Foreign investment in Canada has long been a topic that has attracted much attention and debate, something to which the financial services sector has not been a stranger. The latest edition of the Fee-based Report—Canada features a review of recent foreign participation in retail banking and financial services and seeks to answer some of the questions about why some foreign firms have remained to become industry leaders, while others have departed.
The issue is topical as the financial and insurance industries’ contribution to Canadian GDP has grown at a faster pace than the overall GDP growth. Within financial services, however, the rate at which foreign-owned firms have grown in terms of assets has been slower than the overall growth of the industry.
The relatively low foreign participation in Canada’s financial industry leaves the questions of why, during a time of growth, has foreign participation not expanded and what have been the major drivers causing departure. On the flip side is examination of the factors driving the success or staying power of those firms further entrenching their positions in Canada? How did these firms, both asset managers and distributors, become established and what have been the factors contributing to their ongoing success in, what has been for them, a foreign market place?