Business News

The Trump administration now says it will exclude electronics like smartphones and laptops from 'reciprocal' tariffs, a move that could help keep the prices down for popular consumer electronics that aren't usually made in the U.S.

As market volatility reigns following the continued chaos of United States President Donald Trump’s ever-changing tariff strategies , FP Video talked to two investment specialists who  offer their thoughts on where investors looking to capitalize on the uncertainty should put their money.

FP Video also spoke with Linamar Corp. executive chair Linda Hasenfratz about the long-term effects that existing levies will have on the Canadian automotive sector . Plus, three ways Canada can cash in on the Arctic .

Markets ‘grasping’ at hopes of tariff negotiations

Rebecca Teltscher, portfolio manager at Newhaven Asset Management Inc., talks about the investments she is focusing on to manage extreme market volatility.

‘Unprecedented’ times will test investors

Kelley Keehn, chief executive of Money Wise Institute, talks about how you can protect yourself against market volatility.

Auto tariffs could be ‘quite devastating’

Linamar’s Linda Hasenfratz talks about how the auto sector must look for opportunities during the ongoing trade war.

Canada’s Arctic: 3 surprising ways to cash in on the North

Unlocking the economic potential of the Canadian Arctic isn’t just about natural resources. New mines and pipelines hold promise, but there are other ways to tap into the region’s wealth. Here are three alternative opportunities that could bring in big returns.

• Lessons to lessen tariff impacts: FP Video on Trump's trade war
• Auto tariffs and the federal election: FP video looks at the trade war's latest

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Marketplace analyzed price data from one downtown Toronto Loblaws store from the start of the year to find out if products that are ‘Prepared in Canada’ have increased in price

As tariff pressures force some sellers in China to hike their prices for U.S. markets, some retail experts say Canadians shopping online could potentially feel the ripple effects on everything from electronics to socks.

Duty-free shops across the country, still recovering from pandemic travel restrictions, are reporting massive drops in business in recent months as Canadians increasingly avoid travelling to the U.S.  

Stock markets spiked on Wednesday following U.S. President Donald Trump's announcement of a 90-day pause in "reciprocal" tariffs. Six Democrats say that timing raises questions.

The General Motors CAMI Assembly plant in Ingersoll, Ont., will shut down next month with plans to reopen in the fall at half capacity.

By Kara Lilly and Michael Kosmalski

It started, as these things often do, with a shift too small to notice. One moment, the gilts market was stable. The next, it wasn’t.

A few months ago, a troubling development unfolded in the United Kingdom that spooked Brits, rattled bond desks globally and was largely ignored by everyone else. While United States President Donald Trump commanded the spotlight with a flurry of policy proposals, the yield on 30-year U.K. government bonds (gilts) surged past five per cent.

Now, by nature, bonds are tedious. Studying them tends to make your eyes glaze over. But these were serious moves: yields climbing to their highest levels since 1998, while the pound sterling fell.

Together, these swings raised a pointed question: were bond vigilantes back?

What are bond vigilantes? The term refers to investors who sell off bonds in response to fiscal policies they see as reckless, driving up yields and borrowing costs to enforce discipline. Economist Ed Yardeni coined the term in the 1980s.

A famous episode followed from late 1993 to 1994, when 10-year U.S. Treasury yields rose to more than eight per cent from 5.2 per cent, spooking the administration and prompting deficit-reducing measures. By 1998, yields had fallen to around four per cent.

Bond markets wield power because they’re a country’s credit lifeline. Without affordable credit, governments struggle to function and economies can’t grow. Few forces have shaped history more than the bond market.

For example, in the 19th century, Italy’s unification was partly enabled by Count Camillo di Cavour, prime minister of Piedmont-Sardinia, who secured funding through international bond markets.

More recently, Argentina’s economy collapsed after years of borrowing and a failed currency peg. Investor confidence evaporated, yields spiked, the country defaulted on US$100 billion, and the president fled amid riots.

And you likely know the story of 18th-century France, if not the bond market’s role in it. France, drowning in debt from decades of war, including its costly American Revolution involvement, tried issuing more bonds. Investors balked. Yields soared. The monarchy couldn’t raise funds.

King Louis XVI was forced to convene the Estates-General in 1789, triggering events that ended in revolution, the infamous phrase “Let them eat cake” and the monarchy literally losing its head.

“I used to think that if there was reincarnation, I wanted to come back as the president or the pope or as a .400 baseball hitter,” James Carville, a political adviser to president Bill Clinton, once quipped. “But now I would like to come back as the bond market. You can intimidate everybody.”

Bond vigilantes bring a loaded weapon when they show up to the duel.

In the first quarter this year, it looked like they were back, protesting what many saw as fiscal carelessness in the U.K. Yields spiked. The pound fell. Within days, Finance Minister Rachel Reeves was reaffirming fiscal discipline and markets calmed.

But a few weeks later, a more muted version played out in Germany after Chancellor Merz proposed big defence and infrastructure spending beyond typical debt limits. Yields ticked up.

Three observations are appropriate to make now.

First, bond vigilantes appear to have finally arisen from their long nap.

Second, despite the profligate manner in which governments worldwide have spent and accrued debt over the last few decades, there remains some upper limit on how much fiscal mess bond investors are willing to bankroll.

Third, it may be time to ponder the question many investors have actively avoided because it is such a headache to consider.

What if bond vigilantes come for the U.S.?

Many investors avoid this question. America, they argue, is America, the world’s strongest economy and issuer of the reserve currency. It won’t be easily dislodged. Besides, if the dollar fell and yields soared, the fallout would be too incomprehensible to imagine.

But low odds aren’t the same as an impossibility, and scenarios being potentially painful is the best reason to confront them. Today, there are three reasons this one deserves attention.

First, America’s fiscal position has long been poor and it’s gotten worse.

Second, many of Trump’s policies — including sweeping tariffs , floating a debt restructuring, and the proposed tax legislation advancing through Congress, which could add US$1 trillion to US$2 trillion to the federal deficit over the next decade — look likely to worsen the fiscal outlook and/or rattle bond investors.

Third, bond markets have been acting odd lately. With all the uncertainty and volatility in stocks, this should be a clear “safe haven” moment. Instead, U.S. Treasuries are selling off.

All this is raising the odds of something unwanted: a bond vigilante showdown.

An American standoff with vigilantes could be either performative or nasty. The consequences — to Americans, to markets, to the world — would depend heavily on which one unfolds.

A nasty clash would resemble the British experience, but with U.S. leadership refusing to back down. This would be the “let them eat cake” moment: yields would spike, the administration would inadequately respond, bondholders would lose even more confidence, yields would spike further, the dollar would fall, thereby spooking everyone now actively paying attention and a full-blown crisis would eventually be on everyone’s hands.

This scenario is a bit like the asteroid that National Aeronautics and Space Administration (NASA) recently detected as being on a low-probability collision course with Earth (for a while there, they were giving this a three per cent chance). Those are low odds, but seriously destructive should it occur.

More likely is a performative standoff, echoing the 1990s’ Clinton era. Vigilantes call the administration’s bluff. The administration, unwilling to play chicken, would back down and implement the fiscal changes needed to restore confidence.

Yes, even Trump would be forced to yield.

Markets would reel — bonds and equities alike — but ultimately stabilize. The world would move on, bruised but intact.

Of course, a standoff could be avoided altogether if politicians prioritized long-term national interests over short-term personal gain. Your guess is as good as anyone’s on how likely this is.

For investors, recent events are a warning that market forces can, and do, exert control when governments push too far with excess. Bond vigilantes appear to be back, or at least, circling on the sidelines.

• Imperiled bond markets forced Trump to back down. Could they do it again?
• Why U.S. bonds are falling as investors question their haven status

As Trump and his administration walk the fiscal tightrope, it may be bond vigilantes — quiet, often overlooked — who decide America’s financial fate. People obsess over stocks. History shows, however, the bond market is the ultimate check on power.

It is the real kingmaker.

Kara Lilly, CFA, is a senior investment strategist at Focus Wealth Management and Michael Kosmalski, CFA, is a managing director and portfolio manager there.

By Kara Lilly and Michael Kosmalski

It started, as these things often do, with a shift too small to notice. One moment, the gilts market was stable. The next, it wasn’t.

A few months ago, a troubling development unfolded in the United Kingdom that spooked Brits, rattled bond desks globally and was largely ignored by everyone else. While United States President Donald Trump commanded the spotlight with a flurry of policy proposals, the yield on 30-year U.K. government bonds (gilts) surged past five per cent.

Now, by nature, bonds are tedious. Studying them tends to make your eyes glaze over. But these were serious moves: yields climbing to their highest levels since 1998, while the pound sterling fell.

Together, these swings raised a pointed question: were bond vigilantes back?

What are bond vigilantes? The term refers to investors who sell off bonds in response to fiscal policies they see as reckless, driving up yields and borrowing costs to enforce discipline. Economist Ed Yardeni coined the term in the 1980s.

A famous episode followed from late 1993 to 1994, when 10-year U.S. Treasury yields rose to more than eight per cent from 5.2 per cent, spooking the administration and prompting deficit-reducing measures. By 1998, yields had fallen to around four per cent.

Bond markets wield power because they’re a country’s credit lifeline. Without affordable credit, governments struggle to function and economies can’t grow. Few forces have shaped history more than the bond market.

For example, in the 19th century, Italy’s unification was partly enabled by Count Camillo di Cavour, prime minister of Piedmont-Sardinia, who secured funding through international bond markets.

More recently, Argentina’s economy collapsed after years of borrowing and a failed currency peg. Investor confidence evaporated, yields spiked, the country defaulted on US$100 billion, and the president fled amid riots.

And you likely know the story of 18th-century France, if not the bond market’s role in it. France, drowning in debt from decades of war, including its costly American Revolution involvement, tried issuing more bonds. Investors balked. Yields soared. The monarchy couldn’t raise funds.

King Louis XVI was forced to convene the Estates-General in 1789, triggering events that ended in revolution, the infamous phrase “Let them eat cake” and the monarchy literally losing its head.

“I used to think that if there was reincarnation, I wanted to come back as the president or the pope or as a .400 baseball hitter,” James Carville, a political adviser to president Bill Clinton, once quipped. “But now I would like to come back as the bond market. You can intimidate everybody.”

Bond vigilantes bring a loaded weapon when they show up to the duel.

In the first quarter this year, it looked like they were back, protesting what many saw as fiscal carelessness in the U.K. Yields spiked. The pound fell. Within days, Finance Minister Rachel Reeves was reaffirming fiscal discipline and markets calmed.

But a few weeks later, a more muted version played out in Germany after Chancellor Merz proposed big defence and infrastructure spending beyond typical debt limits. Yields ticked up.

Three observations are appropriate to make now.

First, bond vigilantes appear to have finally arisen from their long nap.

Second, despite the profligate manner in which governments worldwide have spent and accrued debt over the last few decades, there remains some upper limit on how much fiscal mess bond investors are willing to bankroll.

Third, it may be time to ponder the question many investors have actively avoided because it is such a headache to consider.

What if bond vigilantes come for the U.S.?

Many investors avoid this question. America, they argue, is America, the world’s strongest economy and issuer of the reserve currency. It won’t be easily dislodged. Besides, if the dollar fell and yields soared, the fallout would be too incomprehensible to imagine.

But low odds aren’t the same as an impossibility, and scenarios being potentially painful is the best reason to confront them. Today, there are three reasons this one deserves attention.

First, America’s fiscal position has long been poor and it’s gotten worse.

Second, many of Trump’s policies — including sweeping tariffs , floating a debt restructuring, and the proposed tax legislation advancing through Congress, which could add US$1 trillion to US$2 trillion to the federal deficit over the next decade — look likely to worsen the fiscal outlook and/or rattle bond investors.

Third, bond markets have been acting odd lately. With all the uncertainty and volatility in stocks, this should be a clear “safe haven” moment. Instead, U.S. Treasuries are selling off.

All this is raising the odds of something unwanted: a bond vigilante showdown.

An American standoff with vigilantes could be either performative or nasty. The consequences — to Americans, to markets, to the world — would depend heavily on which one unfolds.

A nasty clash would resemble the British experience, but with U.S. leadership refusing to back down. This would be the “let them eat cake” moment: yields would spike, the administration would inadequately respond, bondholders would lose even more confidence, yields would spike further, the dollar would fall, thereby spooking everyone now actively paying attention and a full-blown crisis would eventually be on everyone’s hands.

This scenario is a bit like the asteroid that National Aeronautics and Space Administration (NASA) recently detected as being on a low-probability collision course with Earth (for a while there, they were giving this a three per cent chance). Those are low odds, but seriously destructive should it occur.

More likely is a performative standoff, echoing the 1990s’ Clinton era. Vigilantes call the administration’s bluff. The administration, unwilling to play chicken, would back down and implement the fiscal changes needed to restore confidence.

Yes, even Trump would be forced to yield.

Markets would reel — bonds and equities alike — but ultimately stabilize. The world would move on, bruised but intact.

Of course, a standoff could be avoided altogether if politicians prioritized long-term national interests over short-term personal gain. Your guess is as good as anyone’s on how likely this is.

For investors, recent events are a warning that market forces can, and do, exert control when governments push too far with excess. Bond vigilantes appear to be back, or at least, circling on the sidelines.

• Imperiled bond markets forced Trump to back down. Could they do it again?
• Why U.S. bonds are falling as investors question their haven status

As Trump and his administration walk the fiscal tightrope, it may be bond vigilantes — quiet, often overlooked — who decide America’s financial fate. People obsess over stocks. History shows, however, the bond market is the ultimate check on power.

It is the real kingmaker.

Kara Lilly, CFA, is a senior investment strategist at Focus Wealth Management and Michael Kosmalski, CFA, is a managing director and portfolio manager there.

Stock markets including the Dow Jones Industrial Average, S&P 500 and Nasdaq were all up Friday after a week of massive fluctuations in response to tariff news.

Bonds flashing red forced Donald Trump to U-turn on reciprocal tariffs , but the sector is not out of the woods yet, analysts say.

“Most financial market participants are convinced that turmoil in government bond markets — which suffered neck-snapping volatility from (April 2) through (Wednesday) morning — and recession warnings from corporate executives — like JP Morgan’s Jamie Dimon — were critical in convincing the administration to back off,” Karl Schamotta, chief market strategist at Corpay Currency Research, said in a note.

Prior to Trump’s surprising announcement on Wednesday that he was pausing higher tariffs against many countries, interest rates on United States government bonds of all maturities were on the rise, “ with the long end leading the way higher and exhibiting unusually high volatility,” Royce Mendes, managing director and head of macro strategy at Desjardins Group, said in a note on Wednesday.

He said the yield on the 10-year Treasury rose above 4.5 per cent, while the 30-year yield hit five per cent.

“Liquidity was thin and there were risks that market functioning could begin to deteriorate more meaningfully, which could have proven catastrophic,” he said.

The danger to the financial system was quite real.

Schamotta said it appeared investors earlier in the week were seeking to raise cash by selling bonds, potentially to cover their stock market losses.

“That’s something quite typical of a financial crisis,” he said, as “liquidity gets removed from all global markets simultaneously, then we have a major downturn and other things start to seize up.”

U.S. Treasuries are the global lending market benchmark, so trouble there can spread around world bond markets.

“The risk here was that if we had a rapid rise in yields, then that would trigger distress for participants across the global economy who are reliant on that access to U.S. funding,” Schamotta said, adding that the U.S. Federal Reserve was close to stepping in to add liquidity to keep the bond market functioning.

Stock markets soared Wednesday following Trump’s announcement, recouping trillions of dollars in losses, with the S&P 500 closing up 9.5 per cent, while the S&P/TSX composite index rose 5.4 per cent.

But the euphoria didn’t last long. Markets closed down again on Thursday as investors came to terms with the 10 per cent baseline global reciprocal tariffs and the potential impact on U.S. and global economic activity.

On Thursday, long-term bond yields were on the rise again, though not as precipitously as earlier in the week, with the yield on 30-year Treasuries hitting 4.85 per cent after pulling back. Yields on shorter-term bonds came down.

Economists at National Bank of Canada said they have bond investors in their sights.

“As recent events have emphasized, overseas bond investor attitudes bear close scrutiny,” Taylor Schleich, Warren Lovely and Ethan Currie said in a note.

Schamotta agrees bonds aren’t out of the woods yet.

“The dynamics that we’ve seen even today are worrisome again; firstly, that U.S. yields are rising and the dollar is falling at the same time, indicative of a lot of stress in the financial system,” he said. “And it’s very clear … none of these financial instruments can be relied on to be stable in the coming months.”

 

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The Canadian dollar on Wednesday rose above 71 cents U.S. for the first time since early December, while its American counterpart is being severely weakened by the uncertainty and chaos that Donald Trump’s trade war has unleashed .

The loonie was up 1.4 per cent in early trading Thursday as part of a surge that started Wednesday after Trump announced a 90-day pause on higher reciprocal tariffs, reducing the levy on most countries to a baseline of 10 per cent, but hiking duties on China to 125 per cent.

Read the full story here.

 

 

• Bank of Montreal holds its annual general meeting
• Today’s Data: University of Michigan Consumer Sentiment Index
• Earnings: JPMorgan Chase & Co., Wells Fargo & Co., Morgan Stanley, Blackrock Inc., MTY Food Group Inc., Corus Entertainment Inc.

 

• The next Canadian government will have to deal with an immigration system that has ‘lost its brand’
• Canada could become LNG world leader, but government needs new roadmap, says TC Energy CEO
• Money-laundering questions continue to chase TD months after U.S. sanctions
• Many Canadians are delaying filing their taxes over confusion with recent changes
• Some taxpayers may find CRA’s online portal is missing tax slips

 

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• CIBC warns Canada will end up more tied to U.S. once the tariff dust settles
• Trump tariff chaos sets the stage for 'vicious bear market rallies'

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We have what so many nations wish for: rich, abundant natural resources. It is the one thing that sets apart those in countries suffering energy poverty and the lifestyle and health of the people in nations who enjoy energy prosperity.

A prosperous energy sector means prosperity for all Canadians. We use energy to cook our food, heat our homes, keep the lights on in schools, power our hospitals and drive our kids to activities. The revenue to governments from resource development pays for roads to be built, and health care, education and social programs to be funded.

Energy touches every corner of our lives. But energy has been viewed as a Western issue, not a Canadian one, for far too long.

We are at a crossroads where it isn’t even about energy prosperity; it is now about energy security. It is about whether we can get energy across the country to Canadians who need it. It is about jobs, economic growth and global leadership. It is about Canada stepping up to provide the world with reliable, responsible and affordable energy.

A trade war is raging that puts Canadian jobs at risk. Canada is inextricably tied to the United States, exposing us to the constant changes from Washington that are completely out of our control. Our industry is up to the task of helping Canada be less reliant on our one major trading partner. We have what Canada and the world needs: responsibly developed, abundant Canadian energy.

Since the trade war began, we have heard loud and clear that Canadians want us to build pipelines, to replace foreign energy with our own Canadian-produced energy and to export what we don’t need, prospering from other countries purchasing our products while achieving another collective Canadian goal: helping high-emitting nations decrease their carbon footprint by displacing high-carbon fuels with our cleaner-burning energy.

Developing our resources and building the infrastructure to get them to our ports for export means more Canadian jobs, more revenue to the Canadian economy , a lower global carbon footprint, more Indigenous participation in our national economy and prosperous communities from coast to coast to coast.

But to do all this, we need a federal government to listen to Canadians and prioritize building Canada. We need policies that reflect the reality of energy in this country. Policies that are affordable, sustainable and forward-looking. Policies that support Indigenous partnerships, innovation and economic opportunity. Policies that recognize the value of Canadian energy, responsibly produced, globally respected and urgently needed.

We need the federal government to be thoughtful when managing our trade relationship with the U.S. Enserva has cautioned the federal government that tariffs on inputs to energy production, such as frac sand, oilfield chemicals, steel, precision-machined parts, electronic sensors and industrial equipment, will punish Canadians more than Americans.

Much of our oil and gas production requires sand for pressure pumping. Canada imports about six million tonnes of sand annually from the U.S. because there is no viable domestic alternative at the levels that we need. The Government of Canada’s retaliatory tariff measure will add $240 million a year in additional costs on frac sand alone, significantly impacting drilling operations, creating instability in Canada’s oil and gas sector , and increasing energy costs.

Canada has challenges being competitive in a global market, and counter tariffs have weakened us further, meaning less will be invested and built here. It could result in thousands of job losses and will drive up the cost of living at a time when we are in an affordability crisis.

On behalf of our members, we call on Ottawa to put Canadians first and immediately remove tariffs on all inputs into energy production.

To lessen the detrimental impact tariffs and counter tariffs will have on Canadians, Ottawa needs to strengthen its own hand. The federal government should commit now to repealing policies that impede investment and energy development and immediately expedite approvals of major energy infrastructure that will expand our access to tidewater.

If we want a future where Canada can thrive, then energy must be part of the national conversation. Let’s make sure that when Canadians head to the ballot box, they are thinking about the energy that powers their lives.

• Carney’s plan for ‘superpower’ Canada tricks voters
• Energy might be lukewarm on Carney’s energy plan

For the prosperity of all Canadians, we need to put energy on the ballot.

Gurpreet Lail is chief executive of Enserva, the industry association that represents the energy services, supply and manufacturing sector in Canada.

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Beijing on Friday increased its tariffs on U.S. imports to 125 per cent, hitting back against U.S. President Donald Trump's decision to hike duties on Chinese goods to 145 per cent, raising the stakes in a trade war that threatens to upend global supply chains.

Concerns about Toronto-Dominion Bank’s failure to prevent money laundering in the United States was a key topic at its annual general meeting on Thursday, with some shareholders questioning whether the bank had done enough to address the shortcomings that led to a US$3.1-billion fine by U.S. regulators last year .

This was TD’s first AGM since it became the first bank in U.S. history to plead guilty to conspiracy to commit money laundering last October. Some shareholders wondered whether TD can prevent a similar lapse in Canada and whether further cuts should be made to senior management’s already reduced salaries.

That led TD chair Alan MacGibbon, who will be stepping down by year-end, to apologize to shareholders.

“This really was … the darkest day that we could have imagined it to be, and I apologize (to) all investors for how difficult this was,” he said. “There have been many lessons learned and many practices implemented. And I, just again, apologize for the past.”

TD chief executive Raymond Chun also acknowledged the bank’s failures in its anti-money-laundering (AML) program and said they were “unacceptable.”

Chun, who replaced Bharat Masrani in February, said the bank is undergoing a series of changes as it goes through a “comprehensive plan” it recently developed.

Despite investors’ concerns, most voted in favour of TD’s view when it came to shareholder proposals.

For example, proposals raised to dismiss Masrani as the bank’s adviser and to hire someone from outside the bank to replace Chun as president were voted against by 90 per cent and 99 per cent, respectively, of participating shareholders.

TD has made several changes to rectify its AML program and to regain customers’ trust ever since it was fined and ordered to cap the expansion of its U.S. retail banking in October by the U.S. Department of Justice and other regulators for failing to monitor money-laundering activities at its branches.

The bank has hired several AML experts, reduced the pay of its senior team and changed its CEO, and is now going through a strategic review that will look for ways to reallocate capital, optimize costs, simplify its portfolio and invest in new technology that can support organic growth. The review is expected to be completed by the second half of the year.

As part of its review, TD sold its entire ownership stake in Charles Schwab Corp. to free up about $20 billion. The bank used $8 billion of that to repurchase up to 100 million shares and plans to use some of it to “drive organic growth” and further “deepen” relationships with its 14 million Canadian customers.

The lender also beat analysts’ expectations in its first-quarter results released in February after missing them for two consecutive quarters.

Chun on Thursday said the bank’s response to the AML saga has been decisive.

“We carefully examined the root causes and identified the gaps, behaviours and deficiencies that led to these failures,” he told shareholders. “We are making consistent progress every day, with more work ahead.”

Even so, some shareholders didn’t seem to be too happy with the responses provided by TD’s executives.

One shareholder said he had sent a letter to MacGibbon right after TD was fined in the U.S., asking how the board failed to track the fraudulent activities, but did not receive a response. Chun did not respond and asked for the next question.

• TD reduces pay for top executives amidst anti-money laundering failure
• TD beats analysts expectations after two successive misses

The shareholder returned and said he felt like he had spoken to a “blank wall.” MacGibbon then apologized that no response was given and said that was a mistake.

• Email: nkarim@postmedia.com

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Donning a red-and-white jersey with “Canada Leads” printed on the front, Ontario Premier Doug Ford seemed resolute at a Toronto event on April 7 as he vowed to attract “world-leading scientists” and the “brightest minds” from the United States, many of whom are reportedly concerned about losing their jobs due to President Donald Trump ’s funding cuts.

“We are going to go on many fronts to fight these tariffs,” he said. “But one way to win big time is to get the brightest minds in the United States. I can tell you the president won’t be happy.”

Ford’s statement came days after officials from Manitoba and British Columbia talked about “ rolling out the welcome mat ” for American health-care experts.

Capitalizing on tensions linked to Trump’s policies seems like a good plan, but analysts doubt whether Canada can take advantage of them without implementing crucial changes to its immigration system , especially since some lawyers say the country doesn’t have a specialized program that can successfully attract high-skilled professionals from abroad and it’s also become harder for them to become permanent residents.

“Even if Taylor Swift wanted to immigrate to Canada, she could not,” Stephen Green, a managing partner at Toronto-based Green and Spiegel LLP, said. “We don’t have a program for people with really extraordinary ability … the fabulous artists, the outstanding businesspeople.”

These “extraordinary” foreigners can technically enter Canada with a work permit for a few years, or even get a work permit after studying here, but lawyers say the pathway to becoming a permanent resident from a temporary one has become more difficult in recent years, which would likely discourage them.

Lawyers and consultants hope that whoever forms Canada’s next government can revisit the immigration system and work on its flaws through meaningful discussions with industry, but it’s something that requires urgent attention since Canada’s reputation among economic immigrants has been hit in recent years.

“Canada has lost its brand,” Meti Basiri, co-founder of ApplyBoard Inc., a Canadian digital platform used by students to apply to universities, said. “Any administration that comes in, before getting anything out, needs to stand back and ask, ‘How do we build our reputation?’ Because we are back to where we were 10 to 15 years ago.”

This “damaged” reputation, as Vance Langford, co-president of the Canadian Immigration Lawyers Association, calls it, is a result of unusual trends and changes in the immigration space that have exposed weaknesses in the existing points system used to bring in foreign skilled workers.

Canada has several immigration programs, but most temporary residents and foreigners living outside the country try to come to the country as skilled workers. These programs are managed by an online system called Express Entry, which provides candidates with points for their education level, work experience, English and French language proficiency, age and other factors.

The higher the applicant’s score — out of a total of 1,200 — the higher their chances of becoming permanent residents, which eventually leads to citizenship. The system is designed to attract young, skilled people from around the world.

For example, applicants under 30 receive the highest possible number of points in the age category. Applicants also receive points for Canadian educational degrees and work experience.

The Express Entry system has worked well in the past and allowed a steady flow of skilled newcomers to enter Canada, which relies on immigration for its economic growth. But the number of international students and foreign workers drastically increased after Ottawa looked to fill a record number of job vacancies when the pandemic ended.

Ottawa also introduced a policy in 2023 that allowed it to bypass the points system and set lower cut-off scores for certain groups, such as tradespeople, engineers, health-care workers and French speakers, by conducting separate immigration draws for them.

These two steps meant there were far more temporary residents competing for a smaller number of spots, which vastly increased the cut-off score that general candidates needed to qualify to become permanent residents.

As a result, two million temporary residents are expected to leave the country in 2025 and 2026 as their permits expire, which is also part of the federal government’s plan to reduce Canada’s population growth by 2027 amidst rising unemployment and a housing crisis.

The mass departure could include many temporary residents who have specialized skill sets that could have helped the country’s struggling productivity levels, analysts said, because the points system isn’t always capable of differentiating between highly-skilled newcomers, who are more likely to earn high salaries and boost the economy, and those who barely meet the minimum requirements or are trying to game the system.

For example, a foreign graduate from the Massachusetts Institute of Technology or the University of Waterloo could potentially receive the same number of points as someone with an online university degree in the system’s education segment, Martin Basiri, the other co-founder of ApplyBoard, said in a podcast program called Borderlines on April 1.

He also said Canada’s recent focus on bringing French-speaking newcomers through the category-based draws introduced in 2023 creates an imbalance.

“If you speak French and you have no skills, you are better than if you have a master’s degree in computer science … or (if you) make $150,000,” he said.

Some of Basiri’s employees are currently on a break to sort out their language requirements in order to meet the cut-off scores and become permanent residents, he said.

Until March 21, about 18,500 newcomers were admitted into Canada this year through the French category, which is almost twice as much as the 9,350 admitted through the general draws, according to Steven Meurrens, an immigration lawyer at Larlee Rosenberg Barristers & Solicitors.

Simply put, CILA’s Langford said the category-based draws have made the immigration system “unworkable” for economic immigrants.

“How does Canada expect to attract and retain skilled people with a points system if a candidate in the pool with 510 points does not receive an invitation to apply?” he said. “Category-based draws need to be seriously reduced.”

The leaders of Canada’s two main political parties, Mark Carney and Pierre Poilievre, haven’t talked much about the specific changes to immigration they would make if elected. But both seem keen on keeping a cap on the number of newcomers until there’s enough housing. Immigration hasn’t dominated the campaign trail the way it generally did throughout 2024, with Trump’s tariffs taking up most of the discussion.

But due to various ongoing nuances in the immigration space, Ottawa should be cautious in “pushing too aggressively” to meet its target of bringing down the number of temporary residents to about five per cent of the population by 2027, “especially with a much shorter runway now,” Bank of Nova Scotia economist Rebekah Young said.

That would require what she called an “unrealistic” net reduction of one million people by 2027 that could compel many highly-productive people currently in the workforce to leave.

“It could actually be harmful if they try to stick to those original timelines,” she said. “There should instead be an agenda that really focuses on better integrating and maximizing the potential of those that are in the country.”

Problems, however, also remain at the other end of the spectrum, with some economists expecting many temporary residents to overstay their work permits and not leave the country by either transferring to a visitor permit, applying for asylum or becoming undocumented. This could lead to the government undercounting the population and impact overall economic measures.

CIBC World Markets Inc. economist Benjamin Tal expects Canada’s population to grow by 1.5 per cent in the next two years, which is higher than the government’s prediction of negative growth or a decline.

“Many people who are expected to leave will not leave,” he said. “That’s something that will be the No. 1 challenge facing the new government when it comes to immigration.”

Tal’s prediction already seems to be reflected in the rising number of asylum seekers, many of whom have “unjustly” applied as they have “increasingly fewer hopes to stay in Canada,” former immigration minister Marc Miller said last November.

The number of asylum seekers and related groups increased by about 26,000 in the fourth quarter last year, according to Statistics Canada, marking the 12th consecutive quarterly increase. The total number of asylum seekers was a record 457,285 people as of the end of 2024.

“No government is going to be able to escape having to deal with (rising asylum claimants), Young said. “That’s a very challenging area that is outside the realm of economics. But they’re going to need policies and discussions on how they are going to thoughtfully manage these pressures.”

Another recent change that can discourage high-skilled economic immigrants from coming to Canada is the cancellation of the extra points applicants received upon getting a job offer supported by a Labour Market Impact Assessment (LMIA).

Most employers in Canada looking to hire foreign workers need to receive an LMIA, which is a government document that states they weren’t able to find a worker for a specific position in Canada and had to look for someone abroad.

Foreign workers with LMIA job offers used to get about 50 to 200 additional points, which gave them an edge over others and encouraged them to come to Canada. That was discontinued in March.

Before then, some groups were illegally selling LMIA-approved jobs for thousands of dollars to foreigners — either outside the country or already in Canada — who were desperately looking to boost their points in the Express Entry system and become permanent residents. The more senior the job’s role, the higher the points they received.

But some immigration lawyers believe the government should have taken a more nuanced approach to resolve the problem instead of eliminating all the points in one go.

“They couldn’t deal with the fraud issue, so they didn’t know what to do,” Green said. “They just threw it all in and said, ‘Cancel it.’ There would have been a much better way of doing it.”

Green and Langford both said eliminating the 200 points that the top category of workers used to receive was a mistake since that essentially closes the door for top executives or managerial candidates looking to become permanent residents and these are the kind of people that Canada ideally wants.

“The change makes it impossible for senior executives who are 40 years old or more, working in multinational companies, to immigrate to Canada and, therefore, difficult to attract executives to come here on a work permit,” Green said.

As an example, he said a chef graduating from a Canadian school and with work experience had more chance of becoming an immigrant than a 45-year-old senior executive who runs a multinational company and is responsible for 3,000 people.

Despite these issues, Green still believes Canada has the “best immigration system in the world.” Whoever wins the election just needs to tweak some parts of the system to align them with the government’s aim to boost its economy, he said.

That could mean providing more points to people who study or already work in Canada or to people looking to enter fields where there’s a labour shortage, such as health care or construction.

It could also mean providing additional points to newcomers who earn more than the median salary, such as 25 points for people earning about $60,000 and 50 points for those earning more than $100,000, as Martin Basiri said.

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Whatever those tweaks may be, lawyers say they need to happen quickly; otherwise, Canada may struggle in the next few years to attract the kind of talent it wants, said Meti Basiri, who came to Canada as an international student in 2011 and co-founded ApplyBoard, which is reportedly now valued at $4 billion.

“It’s very important to build the brand and the reputation,” he said. “Or else, we are not going to achieve anything.”

• Email: nkarim@postmedia.com

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The Montreal-based clothing retailer filed for creditor protection late last year.

The Canadian dollar on Wednesday rose above 71 cents U.S. for the first time since early December, while its American counterpart is being severely weakened by the uncertainty and chaos that Donald Trump’s trade war has unleashed .

The loonie was up 1.4 per cent in early trading Thursday as part of a surge that started Wednesday after Trump announced a 90-day pause on higher reciprocal tariffs, reducing the levy on most countries to a baseline of 10 per cent, but hiking duties on China to 125 per cent.

Canada was exempt from the most recent set of tariffs, but remains subject to a 25 per cent levy on steel, aluminum and automobiles, though that levy can be reduced based on the value of U.S.-made auto parts contained within any vehicle. Canadian exports to the U.S. that are not compliant with the Canada-United States-Mexico Agreement remain subject to a 25 per cent tariff.

“The (U.S.) dollar is weakening once more as the initial optimism sparked by yesterday’s tariff reversal yields to a more measured assessment of the risks still facing the U.S. and world economies,” Karl Schamotta, chief market strategist at Corpay Currency Research, said in a note on Thursday as the dollar index, which measures the greenback’s value against a basket of major currencies including the loonie, continued to tumble.

Following Trump’s latest tariff climbdown, the U.S. dollar index dropped 1.34 per cent. However, it has been on a steady decline since mid-January as economists and analysts warned his plan to punish trading partners for perceived unfair practices could cause significant harm to U.S. businesses, consumers and the economy.

The dollar index is down 7.7 per cent since Jan. 13, the peak of a run-up that began a few months before U.S. election day, when Trump’s prospects for the winning the presidency began to improve. At that time, Wall Street expected markets to benefit from a candidate they perceived as business friendly.

With the U.S. economy looking more vulnerable, the odds of a U.S. Federal Reserve interest rate cut are rising, which helps “tilt interest differentials against the greenback,” Schamotta said in an email.

Investors pumped up the greenback in the chase for yields caused by higher U.S. interest rates as central banks around the world, including the Bank of Canada , reduced their policy rates. For example, the Fed’s policy rate stands at 4.5 per cent at the upper end compared with the Bank of Canada’s 2.75 per cent.

Still, “Canada, Europe, and Japan all stand to benefit as investment flows become more diversified,” Schamotta said.

But he said in his note that the safe-haven Japanese yen and the euro appeared to be benefiting the most from Trump’s latest reversal.

The fallout from U.S. tariffs on Canada hasn’t changed much, but “what’s important is the delay in the reciprocal tariff for the rest of world, as it implies less negative global and U.S. growth spillover to Canada,” Noah Buffam, an analyst with CIBC Capital Markets’s fixed income currency and commodity group, said in a note on Thursday.

He also said he was looking for the Canadian dollar to “underperform” other currencies against the U.S. dollar as the year progresses.

Certainly, there are more headwinds blowing Canada’s way that could pull the loonie down.

Stephen Brown, deputy chief North America economist at Capital Economics Ltd., said they’ve rescinded their call for a recession in Canada, but still think the country’s gross domestic product will “slow to a crawl” and that inflation will rise, leading to three more rate cuts by the Bank of Canada to bring the lending rate to two per cent.

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That will likely play against the loonie, he said in a note Thursday morning.

“We still expect interest rate differentials to move against the loonie as markets come around to our view that the Fed is unlikely to cut this year, which suggests the loonie will drop back below 70 cents U.S. soon, to perhaps $0.69,” Brown said in an email, noting that is an improvement from an earlier forecast for the loonie to fall to 67 cents U.S.

“The outlook has improved a bit now that we have a bit more clarity on U.S. tariff plans,” he said.

• Email: gmvsuhanic@postmedia.com

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The S&P 500, Dow Jones Industrial Average and Nasdaq Composite were all down a few points on Thursday after the U.S. raised the total tariffs on Chinese products to 145 per cent.

The European Union will pause its first countermeasures against U.S. tariffs after President Donald Trump temporarily lowered the hefty duties he had just imposed on dozens of countries, European Commission chief Ursula von der Leyen said on Thursday.

Despite all the calls to diversify Canada’s trade, the country will end up more dependent on the United States once tariff negotiations have concluded, according to a well-known economist.

“We are in the midst of a global trade war, and in a global trade war , like in the Cold War, you have to choose sides,” Benjamin Tal, deputy chief economist at CIBC World Markets, said.

On Wednesday, U.S. President Donald Trump turned his global trade war into a faceoff with China after he announced a 90-day reprieve on higher reciprocal tariffs levied against other countries, but raised the rate on the world’s second-largest economy to 125 per cent in a tit-for-tat retaliation.

“The question is, if you have a Cold War trade war between China and the U.S. and you’re Canada, where do you go? There are many issues that (make) the choice clear,” including issues around democracy and human rights,” “but geography is definitely very important,” Tal said.

But there’s more to his forecast.

Tal said Canada has tried to diversify its trade to other countries for decades under various prime ministers, and has inked 15 trade agreements overall, but trade with the U.S. still rose during that time.

“To diversify our export machine away from the U.S., we have the 15 free trade agreements with 51 countries, and our dependence on the U.S.A. went up despite all that,” he said. “It’s very difficult to break.”

Tal believes that during negotiations for a new Canada-United States-Mexico Agreement (CUSMA), the U.S. will demand that Canada increase purchases of American defence products and natural gas, among other things and run contrary to the current national mood.

Canadians are angry with Trump’s attacks on Canada’s sovereignty and economy, with tariffs currently in effect on steel , aluminum and autos. Liberal Leader Mark Carney has tapped into that angst, arguing that Canada can no longer rely on the U.S. and will have to forge new economic ties around the globe.

“The system of global trade anchored by the United States that Canada has relied on since the end of the Second World War … is over. Our old relationship of steadily deepening integration with the United States is over,” Carney said in remarks after Trump announced his reciprocal tariff plan on April 2. “Canada must be looking elsewhere to expand our trade, to build our economy and to protect our sovereignty.”

He said Canada is actively “strengthening” trade relationships with other “reliable” countries.

But Tal thinks the sheer force of geography and the existing interconnectedness between Canada and the U.S. will ultimately override any national aspirations to even weaken existing trade ties, never mind eliminate them.

“When you talk to people in the field, you realize that it’s not so easy to do,” he said, pointing to the proximity, infrastructure and the cost of trying to break away.

He added that Canada will wind up sourcing more from the U.S., not less, after CUSMA is renegotiated.

Tal said if Canada manages to get a new deal on CUSMA, then the final tariff rate won’t be very significant, somewhere in the neighbourhood of five per cent to seven per cent, with some industries, such as energy products, exempted altogether.

“Five years from now we will wake up and realize that our dependence on the U.S. has risen, not fallen,” he said.

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Stocks soared after President Donald Trump said he’d pause some tariffs on dozens of countries for 90 days, signalling a tentative reprieve in trade hostilities that has wiped out trillions from global markets and ignited fears of a United States recession.

The euphoric reaction lifted stocks after four sessions of volatile, high-volume trading pushed the S&P 500 to the brink of a 20 per cent bear-market plunge. The benchmark measure surged as much as 8.3 per cent with almost every company gaining. While bonds eased an earlier selloff, they remained down across maturities for a third day.

“The market cares because 90 days gives you much more significant time to negotiate — that’s all the market wants,” said Art Hogan, chief market strategist at B. Riley Wealth. — Bloomberg

Read the full story here.

 

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Today’s Posthaste was written by Gigi Suhanic with additional reporting from Financial Post staff, The Canadian Press and Bloomberg.

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