Canada’s place at the top of global stock market leaderboard is unexpected for a country many thought was doomed.Aaron Vincent Elkaim/The Canadian Press
At a time when the Canadian economy feels like it’s under siege, the Toronto Stock Exchange serves as a powerful counternarrative.
Over the last two years, the Canadian stock market has gained nearly 55 per cent, after factoring in inflation. That ranks among the very best two-year stock rallies in history, such as the dot-com boom of the 1990s and the rebound from the global financial crisis beginning in 2009.
That’s far better than global stocks have managed over the same period. And it’s nearly double the growth in the S&P 500 index, even though it’s stacked with trillion-dollar giants forging the next great technological age.
Canada’s place atop the leaderboard is an unexpected twist for a country many thought was doomed.
The fate of North American free trade, which constitutes about one-quarter of Canadian GDP, is up in the air. We are four years into the one of the worst housing busts on record. And we’ve been forced to course-correct on immigration, at the expense of economic growth.
The pressures are very real, and stock riches do not fix what ails us.
The story the stock market is telling is that corporate Canada has learned to thrive in an era of perpetual crisis.
It has done so the old-fashioned way. While everyone is fixated on the AI hyperscalers, the TSX has quietly soared on the strength of its banks, insurers, pipelines, gold, oil and utilities.
Here’s a closer look at some of the big-name Canadian stocks that have defied the odds.
Toronto-Dominion Bank
Some figured TD was dead money after its money-laundering scandal, which saw the bank slapped with US$3.1-billion in fines and a cap on its U.S. retail assets. But then TD refocused on Canada and redeemed itself in dramatic fashion. Under new leadership, the bank cut costs, sold its stake in U.S. investment dealer Charles Schwab, then used that money to buy back its own stock and reinvest in the domestic market. Now, soaring financial markets have done wonders for the wealth management divisions of all big banks. Near the top of the pack is TD, whose stock gained more than 120 per cent over the past two years.
BlackBerry Ltd.
Most American investors identify BlackBerry in two ways – first, as a fallen smartphone giant, and second, as a meme stock. But then came the company’s third act as a software player in the automotive sector and in secure communications. “You have no idea how much you still use BlackBerry,” the Wall Street Journal said in a recent headline. The company’s QNX software is found in 275 million cars on the road today. BlackBerry is now in the process of expanding the use of its mission-critical software to things like robots, medical devices and factory applications. Its shares have nearly quintupled in two years.
Magna International Inc.
You’d be hard-pressed to find a company more dependent on trade with the U.S. than Magna, whose automobile parts may cross the border as many as eight times before ending up in a finished vehicle. So, when it first seemed like U.S. President Donald Trump was intent on killing the Canadian auto-parts sector, Magna was an obvious casualty. But it turns out that the Aurora, Ont.-headquartered company is so embedded in the supply chain that the U.S. automakers can’t really function without it. Magna’s shares have stormed back from the initial tariff shock, and are now up by more than 50 per cent from two years ago as the company has worked to protect its margins by cutting expenses and passing on the cost of tariffs on to customers.
Bombardier Inc.
This is another company that found itself in Mr. Trump’s crosshairs. As a global, trade-exposed brand, Bombardier’s business model is not especially well-suited to tariffs in general. But then Mr. Trump called out Bombardier by name, threatening to decertify the company’s Global Express business jets, while suggesting he could also slap 50-per-cent tariffs on Canadian-made aircraft. He backed down, as either move would have been highly disruptive to the aerospace supply chain. Ultimately, Bombardier’s rise as a private aviation pure play would not be denied. The company’s shares have tripled over the past two years as a generational shift in aerospace and defence spending has taken shape.