TD’s Canadian stock picks heavily influenced by macroeconomic themes

Andre-Philippe Hardy, managing director and head of Canadian research at TD Securities, joins BNN Bloomberg to discuss TD Cowen's annual Canada best ideas.

A list of top Canadian stock picks released Thursday by TD Cowen mainly favours companies the bank believes are in the best position to weather the uncertainty gripping Canada’s economy and its trading relationship with the United States.

“If you look at the Canadian economy right now, it’s fairly weak,” Andre-Philippe Hardy, managing director and head of Canadian research at TD Securities, told BNN Bloomberg in an interview Thursday.

His comments came a few hours after TD released its annual “Canada Best Ideas” list of 25 stocks in which the bank has the highest conviction going forward until the end of the year.

Hardy said that in the weeks and months ahead, his team believes three key themes will dominate the investment landscape in Canada: broadening tariff impacts, more fiscal stimulus, and slowing population growth and mortgage resets.

“On tariffs, the Canadian outlook remains clouded by uncertainty around U.S. trade policy even though it’s been six months since tariffs were first imposed,” he said.

“Exemptions for USMCA (U.S.-Mexico-Canada Agreement) compliant goods have helped cushion the blow, but tariffs on Canadian exports are still rising and there’s a lot of uncertainty around negotiations around the USMCA in 2026.”

On the fiscal stimulus side, Hardy said investors should pay close attention to the spending plans included in Prime Minister Mark Carney’s first federal budget, set to be released sometime this fall. He said increased federal spending should be a “positive” for many companies on the list.

“Lastly, there’s still some consumer specific things to be aware of that could be a drag on GDP (gross domestic product) growth in Canada,” Hardy said.

“That would be the reduction in the number of temporary residents, as well as a large number of low-rate mortgages that are resetting at higher rates, which is likely to weigh on household spending.”

With that economic backdrop in mind, Hardy said, many of the stocks included on the list are relatively less exposed to some of those macroeconomic headwinds, with more exposure to supportive themes, such as electricity demand.

Some of the names included on the list are Edmonton-based Capital Power Corp., Montreal-based Gildan Activewear Inc. and Calgary-based Boardwalk Real Estate Investment Trust (REIT).

To hear Hardy discuss those stock picks in detail, click the video at the top of this article for his full interview with BNN Bloomberg’s Andy Bell.