WP Asks: How do advisors buy Canada when the TSX isn’t the Canadian economy?
“Faster approvals through the Major Projects Office and new tax write-offs make energy infrastructure cheaper and quicker to build. More takeaway capacity and access to non-US markets help midstream operators and SAGD oil sands producers with long-life, low-decline assets, and parts of energy services,” Phipps said.
Capital goods and equipment benefit directly from the deduction, he said, with the Bank of Canada’s business survey describing investment plans as robust. “The 28 projects referred to the Major Projects Office include ports, mines, power lines and Arctic roads.”
Nickel, graphite, and tungsten mines sit in the federal projects pipeline, according to Phipps, who said of the sector that “Gold is well off its January high, so this is a quality call rather than a momentum one.”
On power, he said, “Electrification and data-centre demand support power generation and transmission,” while rate-sensitive utilities may keep struggling with yields high.
What the index does not give advisors
“S&P 500 or US mid cap would stand out. These indices complement the financials and resource heavy Canadian market with technology, communication services, health care exposures that are much smaller on the TSX,” Joyce said in his emailed response.
