Canada is among Pakistan’s top-five investors, with firms active in mining, energy, ICT, agriculture and infrastructure. Pakistani reforms (fiscal consolidation, rising forex reserves and record remittances) plus longstanding investment treaties have strengthened investor confidence, spurring partnerships.
Key Points:
- Canada ranks among Pakistan’s top five foreign investors, a fact emphasized by Pakistani officials.
- Key sectors for Canadian FDI include mining (coal/minerals), energy (power and renewables), ICT/telecom, agriculture and infrastructure.
- Leading Canadian banks and companies have a presence in Pakistan’s financial, telecommunications and technology sectors. The vibrant Pakistani-Canadian diaspora (over 215,000 people) further cements business ties.
- Pakistan’s recent reforms – improved fiscal management, multi-decade low inflation and growing foreign-exchange reserves – have made its economy more stable. Overseas remittances reached record highs, bolstering reserves and supporting the currency.
- Bilateral frameworks support investors: the 1959 Canada–Pakistan investment treaty (FIPA) guarantees protections, and talks on preferential trade agreements aim to expand market access.
Canada: A Key Investor in Pakistan’s Growth
Canada and Pakistan share a long, positive relationship dating back to Pakistan’s founding in 1947. In April 2025, Pakistan’s High Commissioner to Canada noted that “Canada is among the top five investor countries in Pakistan” and encouraged Canadian businesses to broaden investment in mining, IT, agriculture, energy and infrastructure. Such endorsements reflect reality: Canadian firms work on major projects and Canadian banks (e.g. Scotiabank/BNS) provide banking and investment services. These relationships lay a solid foundation for future trade and investment growth.
High-Potential Sectors
Several industries present clear opportunities for Canadian investment. Mining and natural resources are an obvious match: Pakistan has vast coal deposits (among the world’s largest) and significant copper and gold reserves and Canada is a global leader in mining technology. Energy and power generation are another key area: Canada’s expertise in hydroelectric and renewable energy can help Pakistan meet its growing electricity demand and lower the prices. Information and communications technology (ICT) is also promising – Canadian IT companies and Pakistani software firms can boost partnership on projects such as digital services and telecom infrastructure. Agriculture is another potential area: Canadian agritech and high-yield seeds can further improve productivity in Pakistan’s large farming sector. In each case, Canadian innovation aligns with Pakistan’s development needs.
Policy Environment and Economic Trends
Pakistan’s recent economic reforms have improved macro stability and helped attract investment. The government’s fiscal consolidation sharply reduced inflation (to about 0.3% in April 2025, from 17.3% in April 2024) and stabilized the currency. Strong remittance inflows have further strengthened the economy: by April 2025, overseas Pakistanis had sent $31.2 billion home (up 31% year-on-year), turning the current account from a deficit into a surplus of roughly $1.9 billion. Even credit-rating agencies took note of the turnaround: Fitch raised Pakistan’s sovereign rating to B– in 2025.
Table 1: Pakistan economic indicators (year-on-year comparison of July–April periods, source: Pakistan Economic Survey 2024–25).
|
Indicator |
Jul–Apr 2023/24 |
Jul–Apr 2024/25 |
Change |
|
Forex Reserves (US$ billion) |
14.3 |
16.6 |
+16% |
|
Current Account (US$ billion) |
–1.3 (deficit) |
+1.9 (surplus) |
– |
|
Worker Remittances (US$ bn) |
23.8 |
31.2 |
+31% |
|
Inflation (Apr, %) |
17.3 |
0.3 |
–17.0 pts |
These positive trends have boosted investor confidence. Global Affairs Canada identifies education, ICT, clean energy and agri-food as especially promising sectors for partnership, complementing Canadian expertise. Bilateral merchandise trade (around US$1.1 billion in 2020) is relatively small, indicating ample room to expand commerce. In sum, Pakistan’s improved fiscal position and record remittances have created a more secure environment for Canadian businesses.
Bilateral Agreements and Outlook
Canada and Pakistan benefit from a robust investment framework. In 1959 they signed a bilateral investment treaty (FIPA) granting Canadian investors legal guarantees (fair treatment and profit repatriation). Negotiations are now underway to modernize this FIPA, expanding protections to cover today’s economy. This treaty reassurance, along with ongoing talks on preferential trade agreements, strengthens the case for Canadian firms.
The Pakistani-Canadian community also acts as an economic bridge. Diaspora entrepreneurs and professional networks regularly organize trade delegations and joint ventures. Canadian financial institutions (banks, export-credit agencies and development funds) actively support projects in Pakistan, from power plants to agri-business ventures. For example, Canadian export financing has helped fund Pakistani power and water projects, leveraging Canadian engineering and financial expertise. Together, these factors create an inviting environment for expanding Canada–Pakistan business collaboration.
Conclusion
Pakistan is now at an economic inflection point that offers significant opportunities for Canadian engagement. Its young population, rich natural resources, a large market and strategic location make it an attractive destination for diversified investment. Meanwhile, recent reforms have stabilized the economy and strengthened safeguards for foreign investors. For Canada, applying its strengths in mining, renewable energy, information technology and agriculture to Pakistan’s development needs promises mutual rewards. This partnership can open new markets for Canadian companies while providing investment, jobs and technology to Pakistan. With continued cooperation and focused support, Canada–Pakistan economic ties are poised to deepen in the years ahead.
* Dr. Muhammad Jahanzaib is the Founder & Chief Visionary Officer (CVO) of Diamanium Thinkers, a global think tank. He holds a PhD in International Relations, specializing in the intersection of politics and economics in Pakistan’s foreign and domestic policy. A double gold medalist and published scholar, he writes on economic intelligence, economic diplomacy, political economy, AI, and regional cooperation in South Asia and beyond. He can be reached at jahanzaibdgc@gmail.com.
References:
- “HC highlights Pak-Canada potential in bilateral investment, trade growth” – Associated Press of Pakistan (APP) (https://www.app.com.pk/diplomatic-corner/hc-highlights-pak-canada-potential-in-bilateral-investment-trade-growth)
- “Canada-Pakistan relations” – Global Affairs Canada (Government of Canada) (https://www.international.gc.ca/world-monde/pakistan/country-pays/pakistan/relations.aspx?lang=eng)