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Canadian Finance Minister Bill Morneau arrives to a press conference following his speech and discussion about the 2019 federal budget in Toronto, on March 20, 2019.

Cole Burston/The Canadian Press

Conservative Leader Andrew Scheer and Liberal Finance Minister Bill Morneau trudged through an Ottawa blizzard last month to pitch their respective platforms to an audience of Canadian chief executives. The chill in the room matched the temperature outside, and helps explain why the country’s business leaders are increasing their investments outside Canada.

In Mr. Morneau’s session, the former CEO challenged members of the Business Council of Canada – a collection of 176 top executives from every sector – to make use of tax cuts enacted in last November’s economic update by boosting capital spending. He was greeted with what amounted to passive resistance.

While several executives who were in the room said Mr. Morneau made a strong speech – council members are asked to keep meetings confidential, so the sources asked not to be named – many CEOs are reluctant to invest in Canada when the country’s economic growth prospects are sluggish. Energy executives are particularly reluctant.

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When Mr. Scheer took the stage, he bombed. In what was the Conservative Leader’s first encounter with many of the CEOs, he served Tim Hortons to a Starbucks crowd. Several audience members said Mr. Scheer focused his message on what his party planned to do for small businesses and entrepreneurs, a subject that’s irrelevant to the heads of country’s largest companies. There was little talk of making Canada more competitive on the world stage.

The fact that politicians and corporate types don’t see eye-to-eye may be unsurprising, but the lack of business confidence in Liberal and Conservative leaders comes at a time when Canadian CEOs are increasingly looking outside the country for growth opportunities. The Fraser Institute published a report on Thursday that showed, over the past six years, foreign direct investment by domestic companies increased by 74 per cent, while foreign corporations cut their investments in Canada by 55 per cent.

“When you see less money coming in from foreigners at the same time Canadians are increasingly investing abroad, it’s a strong indication that Canada is not a good place to invest,” Steven Globerman, a Fraser Institute senior fellow, said. He noted that these trends extend across industries, with less capital going into manufacturing and utilities, along with an oil and gas sector that hasn’t yet recovered from a crude-price crash five years ago.

Takeover activity tells the same story: Domestic companies are spending twice as much on cross-border acquisitions as foreign players are spending on Canadian takeovers. Investment bank Crosbie & Co. Inc. tracks mergers and acquisitions traffic, and found Canadian companies spent $109-billion on foreign takeovers in 2018, while international companies dropped $50.4-billion buying domestic businesses.

“Investment by foreign companies and individuals is vital to increasing productivity and improving living standards for Canadian workers, so when the level of investment drops, Canadians suffer,” Mr. Globerman said.

Canadian governments of all stripes are looking for corporate support on essential infrastructure such as pipelines. Yet in recent years, the country’s leading utilities – TransCanada Corp., Enbridge Inc., Fortis Inc. and Emera Inc. – all made multibillion-dollar U.S. acquisitions. When the history of this era in business is written, it will highlight TransCanada’s decision to drop the word Canada from its name after 68 years, and rebrand as TC Energy to reflect its shift to U.S. and Mexican markets.

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This country’s business leaders continue to take part in the domestic political debate; they’re all fascinated by October’s federal election. But CEOs see the current crop of federal leaders as uninspiring, and are voting with their wallets by committing an increasing chunk of capital to doing business outside Canada.

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