• China’s looking to capitalize on Canada/U.S. trade tensions

• Defense spending is back in the political spotlight

• Both candidates announce plans for tax breaks, we dig into the impact

• Power producer earnings recap: natural gas looks hot

• You can finance a burrito now

• Re-positioning continues, with a lot of return dispersion

We could be getting caught in-between two global superpowers as Beijing’s envoy calls for more trade with Canada, arguing the U.S. shouldn’t force us to pick sides.

Our framework for navigating the trade war: https://www.bullpen.finance/content/51

Defense spending enters the political arena

Yesterday Mark Carney promised a rapid acceleration in defense spending, should Liberals maintain Canadian leadership. It’s a position shared by Poilievre, and one we highlighted in January as a likely outcome of Trump’s tariffs, given our trailing position among NATO nations.

Like we said in January, the 5% target Trump was pushing for was never really in play. 2% now feels very much on the table though, with Carney giving a 2030 deadline. Poilievre’s stance on timing is less clear.

Where Poilievre shows greater clarity than his opponent is in his plan to fund the $20B gap, redirecting dollars spent on foreign aid towards national sovereignty.

Bottom line: liberals or conservatives, defense wins.

Tax breaks will be the next battlefront

We’re getting more clarity on the tax strategy of both parties, with Carney announcing a 1% reduction to the lowest tax bracket as part of his campaign and Poilievre upping the ante a day later, with a proposed 2.25% reduction.

A similar dynamic played out in housing, with Carney’s plan to eliminate GST on homes priced under $1M for first-time homebuyers followed up by Poilievre’s plan to abolish GST on new homes priced under $1.3M.

While similar, Carney’s strategy is aimed more at entry-level affordability, while Poilievre’s strategy is aimed more at stimulating new housing supply.

As our housing dashboard shows, we need all the help we can get on the supply side!

IPP recap: soft quarter, strong outlook

The Canadian power producers were one of the few industry groups to post somewhat disappointing numbers, driven by lower power prices and gaps in development.

The outlook for the group looks much better than the quarter though, as we dig into in the full piece! Check it out:

If the above link won’t work, try this: https://www.bullpen.finance/content/70

In other news, DoorDash has partnered with Klarna, leveraging its buy now pay later (BNPL) services to offer U.S. users flexible payment options on food orders…

There might be another leg up on the ozempic trade after all.

• Couche-Tard understates antitrust risk in takeover proposal, 7-Eleven owner says

• What Elections Mean for Canada and the Future of North America

• TD Economics: Canada – Knock-Knock-Knockin’ on Recession’s Door

New Found Gold (NFG) announced a disappointing resource estimate for the Queensway Gold Project on Wednesday, sending shares down 30% on the day. We normally wouldn’t surface this type of story but with a lot of executive turnover right before the announcement, it underscores an important point: be very diligent on Canadian small caps.

BRP (DOO) sold off again as investors seem worried for the earnings print coming today. 2025 estimates have been falling like a rock and the company has a tough macro backdrop, with the trade situation and a weaker consumer posing large risks.

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