Canada’s economic stren­gth over many other developed countries has increased its popularity with foreign investors, according to a new report.

CIBC World Markets says that a growing list of “strategic advantages” are generating interest in Canada and boosting its presence in global portfolios.

“Canada is increasingly on the lips and minds of international investors,” says CIBC government strategist Warren Lovely.

The report released yesterday says Canada hasn’t been forced to take as many drastic measures to stabilize its debt ratios. Provincial governments have not faced the same financial constraints that have burdened many U.S. states, and the report said both federal and provincial revenues are “brightening materially.”

The report said that years of fiscal outperformance and surpluses have enabled Canada to slash corporate tax rates and make other tax reforms that give it an advantage over other jurisdictions.

However, Canada could face hurdles that would add pressure to a continued outperformance, Lovely said. He pointed to the potential pressure Canada could face because of its reliance on the United States, historically the market for three-quarters of exports.

Other risks include continued strength of the loonie, which make exports of Canadian goods less competitive, an overheated housing market and highly indebted household sector, the report said.

Latest From ...