Good morning. A spate of earnings reports today offers a snapshot of how key Canadian industries are navigating trade uncertainty and signs of cooling consumer demand. That’s in focus today – along with a look at why I’m hot about coffee.
Up first
In the news
Investing: Brookfield Asset Management Ltd. is poised to chase a new wave of growth from wealthy individuals and everyday savers who want to invest in private assets. The Trump administration announced this morning it is throwing open the gates to a multitrillion-dollar change in investing markets.
Telecoms: An Ontario judge has sided with shareholders of a shuttered telecom startup in a court battle that has stretched over a decade.
E-commerce: Shopify Inc. regained its position as the most valuable company in Canada after reporting double-digit revenue growth and profit for the second quarter and projected continued growth in the coming months.
On our radar
U.S. President Donald Trump’s sweeping new tariff regime took effect at 12:01 a.m. ET, marking the biggest escalation in American trade protectionism in a century. The levies will hit nearly all U.S. trading partners, ushering in what analysts call a new global trade order.
- In Canada, where tariffs have already risen, Prime Minister Mark Carney is citing the United States-Mexico-Canada Agreement – which shields most Canadian exports – as grounds to hold off on retaliation.
- Ontario Premier Doug Ford is warning Trump could scrap the USMCA “with one signature” and says Ottawa must prepare for early talks.
- Dominic LeBlanc, the federal cabinet minister in charge of U.S.-Canada trade, said he expected Carney and Trump to speak “over the next number of days.”
A Popeyes in Toronto.Galit Rodan/The Globe and Mail
In focus
A keen eye on key earnings
What a cross-section of Canadian companies is telling us about households, headcounts and priorities
Restaurant Brands International
Menu inflation in Canada and the U.S. has cut into lower-income traffic, even as higher-income customers spend more per visit.
- The results: Restaurant Brands reported an adjusted profit of 94 cents per share, missing analysts’ estimates of 97 cents, owing to increased advertising expenses coupled with higher costs from supply chain and commodities such as beef and coffee.
- The backdrop: The owner of Tim Hortons, Burger King and Popeyes has faced a dip in consumer confidence and broader uncertainty in the economy.
- Winging it: Investors aren’t likely to spend too much time on allegations of fowl play. But clandestine surveillance, allegations of unsafe chicken and a broken business relationship are chronicled in Susan Krashinsky Robertson’s recent story behind a Canadian lawsuit against Popeyes Louisiana Kitchen.
A Canadian Tire in Ottawa.Sean Kilpatrick/The Canadian Press
Canadian Tire
The 102-year-old retailer’s report offers a read on the health of Canadian household spending across both essential and discretionary goods, making it a useful gauge of consumer resilience in a shifting economic environment.
- The results: The Toronto-based retailer reported a 5.6-per-cent rise in comparable sales last quarter, led by demand for seasonal goods and auto supplies. Earnings dipped slightly as it ramped up spending on store upgrades, tech investments and loyalty expansion.
- The backdrop: The company is undergoing a major restructuring to address internal issues and brace for external shocks.
- The roadmap: Its $2-billion “True North” strategy includes store upgrades, tech investment (including AI), and an undisclosed number of layoffs. It confirmed cutting corporate‑level jobs last week without saying how many.
Zooming in on "Business Brief," no doubt.Sean Kilpatrick/The Canadian Press
BCE Inc.
Canada’s telecommunications companies are facing competitive and inflationary pressures, a slowdown in immigration and an uncertain trade outlook.
- The results: BCE’s profit rose 6.6 per cent last quarter, but adjusted earnings fell nearly 20 per cent as restructuring costs and shifting revenue streams weighed on results. The company is cutting jobs and streamlining operations while staying invested in wireless and fibre expansion.
- Losing the signal: Bell Canada parent company BCE added 44,500 net postpaid mobile customers, down 43 per cent from last year, and 49,900 prepaid mobile customers, down three per cent.
- That compares to rival Rogers Communication Inc.’s 61,000 total net adds and Telus Corp.’s 55,000 adds in the quarter.
- Dashed hopes: Bell had lagged peers in wireless for recent quarters, and analysts had been hopeful the company would make up ground as mobile pricing stabilized during the quarter.
- Traditional home services like internet, TV, and landline phones declined, and the company expects earnings to fall again this year even as free cash flow improves.
With a file from Irene Galea
Canadian Natural Resources
The vast majority of Canadian oil and gas exports are compliant under the USMCA, so major producers have maintained a relatively positive outlook.
The results: The Calgary-based oil and gas giant beat earnings expectations as second-quarter production jumped 10 per cent year over year, helped by recent acquisitions and the expanded Trans Mountain pipeline.
- While crude prices fell amid weaker global demand and OPEC+ output hikes, higher output cushioned the impact. The company now expects to boost production by another 12 per cent in 2025.
- Heading east: Oil producers are also counting on shipping more to new markets. Pembina, which reports after close, is expected to update investors on the Cedar LNG project in Kitimat, B.C., during its earnings call tomorrow.
I don't think this is what working with AI means. (Yet?)Valerii Apetroaiei/iStockPhoto / Getty Images
OpenText
Canada’s largest software company, which reports after close, recently outlined a sweeping corporate realignment that centres around artificial intelligence. The tech giant’s services are used by companies around the world to store, organize and secure data.
- The layoffs: OpenText has cut about 2,000 jobs in recent months as part of a global restructuring tied to its new “AI-as-default” mandate.
- AI first: In an e-mail to employees, CEO Mark Barrenechea said employees must now prove AI can’t do a task before requesting more headcount. AI skills are required for new hires, and usage will factor into performance reviews.
- A cautious step: The company expects the plan to generate up to US$550-million in annual savings. But analysts will be watching how far its cost-cutting and AI-first strategy can carry earnings momentum after a 13 per cent year-over-year revenue drop last quarter.
Charted
Harsh weather, shifting consumer habits and market disruptions this year have driven up the prices of coffee, chocolate and ground green tea powder known as matcha by as much as 30 per cent or more, with tariffs often exacerbating existing supply constraints.
Independent cafés are absorbing costs as long as possible, but many are now raising prices by 10 per cent or more to stay afloat.
Bookmarked
On our reading list
Don’t look down: It’s ‘the summer of lowballing’ in Toronto’s real estate market.
Don’t ask ChatGPT: The platform is giving teens dangerous advice on drugs, alcohol and dieting, new research shows.
Don’t throw out those clothes: Your junk could be Gen Z’s treasure. How to profit from the resurgence of Y2K fashion.
Morning update
Global markets advanced as tech-led gains on Wall Street, upbeat earnings and growing expectations for U.S. rate cuts boosted sentiment. U.S. futures were in positive territory, while TSX futures pointed higher after Shopify led Canada’s main stock market another record close yesterday.
Overseas, the pan-European STOXX 600 was up 0.95 per cent in morning trading. Britain’s FTSE 100 slid 0.65 per cent, Germany’s DAX advanced 1.69 per cent and France’s CAC 40 gained 1.28 per cent.
In Asia, Japan’s Nikkei closed 0.65 per cent higher, while Hong Kong’s Hang Seng rose 0.69 per cent.
The Canadian dollar traded at 72.78 U.S. cents.