AN ECONOMIC EVALUATION OF FOREIGN FINANCING OF INVESTMENTS IN CANADA

Large-scale, capital intensive projects in Canada frequently rely on foreign financing and as a result the foreign-owned segment of many sectors has grown considerably. New projects either reallocate the existing foreign investment into the country or cause a net augmentation to the capital stock of a country. In this paper we endeavour to determine a methodology for estimating the nature and magnitude of any net economic benefits which result from the foreign financing of new investments; such benefits should be included in the overall economic evaluation of a project.