Foreign investment flows into Government of Canada (GoC) bonds have surged since the financial crisis. Our empirical analysis suggests that foreign flows of $150 billion lowered the 10-year GoC bond yield by 100 basis points between 2009 and 2012. In addition, foreign outflows largely accounted for the 70-basis-point rise in the 10-year yield around the U.S. “taper tantrum” in mid-2013. Our analysis suggests that foreign investment flows mostly reduced bond risk premiums rather than lowering expectations of future short-term interest rates.