Recent missile attacks across the Middle East are raising concerns about the stability of Persian Gulf countries, potentially disrupting the investment that has drawn foreign capital and a growing number of Canadian companies to the region.
Gulf States’ Safe Haven Status Questioned
Cities like Dubai and Abu Dhabi in the United Arab Emirates, and Doha in Qatar, have flourished as global commerce hubs over the past two decades, supported by oil-rich governments investing in infrastructure and development.
These cities have offered political calm, a characteristic shared with nations like Switzerland, making them less susceptible to regional conflicts. This neutrality, combined with low tax rates, has attracted both wealthy individuals and investment.
Canadian firms have been actively involved in the region, with Brookfield Asset Management raising capital there. Royal Bank of Canada and National Bank of Canada are looking to expand their presence, while Manulife Financial Corp. and Sun Life Financial Inc. have recently opened offices in Dubai to attract high net worth investors.
The recent surge in instability began this past weekend following Iran’s retaliation for prior missile attacks. Debris from 390 missiles and 830 drones impacted airports in Abu Dhabi and Dubai, the Burj Al Arab hotel in Dubai, a building in Bahrain, and the Fairmont The Palm in Dubai, injuring four people.
“The image of Gulf cities as stable havens and safe places to live, work, and do business is now under attack,” said Kristian Coates Ulrichsen, a fellow for the Middle East at the Baker Institute for Public Policy. He added that the attacks are a “rude awakening” and could cause lasting psychological effects.
Karen Young, a senior research scholar at Columbia University’s Center on Global Energy Policy, noted the potential impact on global capital flows. She highlighted the increasing role of Gulf sovereign wealth funds in global infrastructure investment, private equity, and the energy sector.
The region is home to numerous sovereign wealth funds managing hundreds of billions of dollars, which have been increasingly invested in the West to diversify away from oil. In late 2024, Mubadala Capital, based in Abu Dhabi, acquired CI Financial for $4.7-billion.
Qatar recently committed to making “significant strategic investments in Canadian nation-building projects” following a visit by Prime Minister Justin Trudeau in January.
The Gulf region’s financial appeal is also rooted in its infrastructure projects, attracting Canadian capital and expertise. In 2022, the Caisse de dépôt et placement du Québec partnered with DP World to co-invest US$5 billion in UAE assets, including the Jebel Ali Port in Dubai and the National Industries Park.
DP World temporarily suspended port operations at Jebel Ali over the weekend, following a fire caused by debris from intercepted missiles or drones. The Caisse de dépôt et placement du Québec stated it is monitoring the situation closely.
Canadian engineering firms WSP Global Inc. and Atkinsrealis Group Inc. have also benefited from the infrastructure boom, with WSP involved in projects like the Zayed National Museum in Abu Dhabi and highway upgrades in Kuwait.
While the current instability may subside, particularly if talks between the U.S. and Iran lead to a ceasefire, the possibility of further destabilization remains. Dubai attracted the most millionaires globally in 2025, according to Henley & Partners.
The weekend’s events demonstrated that previously unthinkable scenarios are possible, highlighting the fragility of the region’s stability.
With files from Andrew Willis and James Bradshaw
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