Mark Carney, Canada’s newly elected prime minister (designate), boasts a decorated track record, including the top job at the Bank of Canada during the Global Financial Crisis, and later at the Bank of England, over a decade at Goldman Sachs, and half a decade on the board of trillion-dollar conglomerate Brookfield Asset Management.
While a federal election will occur as soon as April 28, Carney secured more than 85 per cent of the Liberal vote and came out ahead in all 343 ridings, demonstrating his strong national support. He is also a 57 per cent favourite to win the next federal election, according to Polymarket as of March 20, giving him a more than fair chance of keeping his job.
Given this state of affairs, there’re good reasons to explore the catalysts that Carney may have in store for the Canadian investment landscape based on what we know about his policies.
10 investment catalysts in Mark Carney’s Canada
- Eliminating the carbon tax.
- Expediting clean energy projects.
- Incentives for energy-efficient homes.
- Potential penalties on environmentally harmful imports.
- Expanding Canada’s EV charging infrastructure.
- Establishing Canada’s global clean energy leadership.
- A focus on defense spending.
- Increased spending on artificial intelligence (AI).
- Reasonable immigration caps.
- A globalized response to Trump’s tariff war.
1. Eliminating the carbon tax
On March 14, Carney signed an order to eliminate Justin Trudeau’s carbon tax on consumers, which increased fossil fuel costs to foster the adoption of and investment in greener alternatives. A federal tax on heavy emitting companies remains in place.
Investment catalyst: Established oil and gas producers with interests in renewable technology stand to benefit from both the incentive for industry to decarbonize and consumer spending driven by lower fuel costs.
2. Expediting clean energy projects
Carney has proposed a plan to streamline the approvals process for clean energy projects, including electrical generation, transmission, distribution and storage.
Investment catalyst: Canadian stocks tracking differentiated clean energy resources and/or technologies should expect differentiated returns.
3. Incentives for energy-efficient homes
Carney plans to increase incentives for Canadians living in energy efficient homes, including through alternative financing mechanisms and the Canada Mortgage and Housing Corporation.
Investment catalyst: Canadian real estate stocks with a record of sustainability, such as Dream Residential REIT, may see renewed interest, propelled by falling interest rates and real estate players’ renewed ability to deploy capital.
4. Potential penalties on environmentally harmful imports
On the campaign trail, Carney pledged to impose penalties on imported products that fall short of Canada’s climate standards, opening the door for a premium on participants in traditionally heavy-polluting industries offering leading-edge advancements in sustainability.
Investment catalyst: While emissions-heavy imports are positioned to fall out of favor with Canadian investors, environmental breakthroughs in areas of unmet need are likely to garner the majority of the upside. One noteworthy candidate, PyroGenesis (TSX:PYR), owns a portfolio of technologies proven to decarbonize and reduce waste in some of the world’s dirtiest industries.
5. Expanding Canada’s EV charging infrastructure
Continuing its environmental focus, the prime minister’s policy framework seeks to expand Canada’s network of electric vehicle charging stations, relying on green bonds and financing through the Canada Growth Fund and Canada Infrastructure Bank. Carney’s new finance minister, François-Philippe Champagne, who has played a key role in growing Canada’s EV supply chain, will only serve to further this initiative.
Investment catalyst: Public companies with enough resources to scale at the pace of this demand, should it materialize, should come out ahead of the competition. Take a look at NFI Group (TSX:NFI), market capitalization C$1.54 billion, which turned profitable in 2024 and operates an infrastructure solutions division specializing in EV charging.
6. Establishing Canada’s global clean energy leadership
A core tenet of Mark Carney’s approach is to invest in transforming Canada into a ‘clean energy superpower‘ with emphasis on nuclear, hydro, wind, hydrogen and battery power, as well as carbon capture.
Investment catalyst: Given that renewable energy must be generated at comparable or lower costs than fossil fuels to remain viable over the long-term, err on the side of operations with a proven ability to grow market share at a profit. Cameco (TSX:CCO), a leader in uranium production going back 60 years – including two world-class facilities in Canada – has grown revenue every year since 2021 and has been net income profitable every year since 2022.
7. A focus on defence spending
Mark Carney has promised to accelerate defence spending, aiming for NATO countries’ agreed-upon goal of two per cent of GDP by 2032. An October report from the Parliamentary Budget Officer estimates that Canadian defence spending would need to hit C$81.9 billion by 2032-33, almost double that projected for 2024-25, to keep this promise.
Investment catalyst: Established brands serving the industry will cut to the front of the line when it comes to project bids. Think Magellan Aerospace (TSX:MAL), which is approaching three decades in service, whose stock has more than doubled since 2020 thanks to revenue growth since 2021 and growing net income since 2023.
8. Increased spending on artificial intelligence
Under his government, Carney has stated that he would put AI in service of the public good, deploying it across federal government services, expediting major investments in AI infrastructure, and incentivizing adoption across the economy more broadly, touching on industries such as health care, education and construction.
Investment catalyst: This mandate represents a tailwind for a diversity of industries, but the winners will ultimately be determined based on cold hard results, shining a light on the companies most efficiently filling unmet needs. Consider Quantum eMotion (TSXV:QNC), an AI stock pushing technological boundaries in cybersecurity through the integration of quantum mechanics. Shares have soared by more than 500 per cent year-over-year.
9. Reasonable immigration caps
Carney has spoken in favor of a cap on immigration targets to provide relief to Canada’s strained housing and healthcare systems.
Investment catalyst: The prime minister’s restraint, compared to Trudeau’s come-one-come-all approach, will foster a higher bar for those seeking a new life in Canada, creating a prospective environment for picks-and-shovels players like CanPR (TSXV:WPR), an immigration technology provider with more than 150,000 monthly active users, to build brand recognition.
10. A globalized response to Trump’s tariff war
When it comes to tariffs, Carney has not minced words about keeping counter-tariffs in place “until the Americans show us respect … and [make] credible and reliable commitments to free and fair trade.”
His platform also leans heavily on diversifying trade away from the U.S., increasing export capacity to like-minded countries in the areas of oil and gas, clean energy, metals and minerals, AI and human capital.
Investment catalyst: With U.S. stocks having outperformed the rest of the world going back over a decade, research from Schwab, Vanguard and Research Affiliates suggests that they will not continue to do so for much longer. As such, there could hardly be a better time to consider increasing your allocation to Canadian, Developed International and Emerging Markets stocks.
How are you positioning your portfolio to capitalize on Canada’s near-term political environment? Which stocks do you consider prospective plays?
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(Top photo: Adobe Stock)
