This is the abridged version of the article, which can be read in full here.
Politics and Economics
Mark Carney’s election victory in April 2025 marked a clear shift in Canada’s political and economic direction. Initially, his focus has been on managing relations with US President Donald Trump amid heightened trade tensions and aggressive tariff rhetoric. Carney has pursued a conciliatory strategy, rolling back proposed digital taxes and retaliatory tariffs, while arguing that Canada retains a relatively favourable position through broad USMCA exemptions. However, with the USMCA review scheduled for 2026, trade relations with the US are set to remain Carney’s most significant near-term policy challenge.
Beyond trade, Carney has pivoted decisively toward a more pro-growth domestic agenda, particularly around energy and infrastructure. In contrast to Trudeau’s climate-first approach, Carney has prioritised capital deployment and export competitiveness, explicitly seeking to position Canada as a global ‘energy superpower’. This has included announcing almost ~CAD 120bn of fast-tracked investment across LNG, nuclear, hydro transmission, and critical minerals. While early initiatives focused on lower-carbon energy, subsequent agreements with Alberta have signalled greater openness to oil infrastructure, including the potential for a new oil pipeline, alongside the suspension of emissions caps and possible amendments to the tanker ban. These moves have faced environmental and Indigenous opposition but have been broadly welcomed by investors, especially in the midstream sector.
Canadian Midstream
Production growth in Canada’s largest basin, the West Canadian Sedimentary Basin (WCSB), is expected to remain strong through the end of the decade, supported by major energy infrastructure projects on Canada’s West coast. The start-up of LNG Canada in 2025 marked Canada’s entry into global LNG markets, with further LNG and LPG export expansions set to drive additional demand for WCSB gas and NGLs. At the same time, the Trans Mountain Expansion continues to ramp up oil exports to the West Coast. These developments are encouraging producers to expand activity and creating follow-on growth opportunities for midstream operators, particularly those with assets concentrated in the WCSB.
The possibility of a new large oil pipeline, proposed under Prime Minister Carney’s MOU with Alberta, was the most discussed of Carney’s new infrastructure projects. A pipeline of at least one mbpd would meaningfully increase Canadian export capacity and benefit liquids-focused midstreams across pipelines, NGLs, and terminals. That said, management teams remain cautious. The project is still at an early stage, faces significant Indigenous and environmental opposition, and would likely require uneconomic tolls without some form of government support. For now, the MOU is best viewed as a positive signal rather than a project that can be confidently underwritten.
Geopolitically, the potential return of Venezuelan heavy oil to US markets adds a new dimension. A recovery in Venezuelan supply could displace Canadian barrels from US Gulf Coast refineries, which would only increase the urgency of for a new oil pipeline heading West.
Rails
Rail industrial volumes have been under pressure as US manufacturing activity has stagnated. We can see this via the Institute for Supply Management (ISM) index which has been in contraction for most of the past three years, marking one of the longest freight recessions in decades. Rail operators we met are not yet calling an inflection, noting that a meaningful recovery would likely require lower interest rates to revive capital spending and housing activity.
A more constructive medium-term dynamic could come from tightening trucking capacity. Trucking-exposed rail segments remain pressured by low truck rates, which have been sustained by excess trucking supply since the 2021–22 freight boom. This may now be changing as the Trump administration tightens rules around non-domiciled commercial driver licences. These changes could force a meaningful amount of trucking capacity out of the market over the next two years, supporting higher truck rates and improving rail pricing. Rail management teams were broadly constructive on this potential shift, despite ongoing legal challenges.
Finally, the proposed transcontinental merger between Union Pacific and Norfolk Southern is likely to dominate industry headlines in 2026. The process is off to a rocky start after the regulator rejected the merger application on completeness grounds, setting the stage for a protracted and highly scrutinised review.
Independent Power Producers
Independent Power Producers (IPPs) are increasingly focused on extracting more value from their existing assets as power demand continues to outpace supply. The two most attractive, capital-light levers are recontracting and repowering, though feedback was mixed across renewable (e.g. hydro, wind and solar) and conventional (e.g. gas) generators.
Recontracting opportunities have proven highly region and technology specific. As one industry participant noted, “if you’re not baseload or tied to data-centre demand, recontracting at higher prices is far from guaranteed.” Among the renewable IPPs, Brookfield Renewable stands out, with hydro assets well positioned to secure higher prices and longer-dated contracts from corporate offtakers such as Alphabet. By contrast, renewable IPPs with more intermittent wind and solar portfolios, including Boralex and Northland Power, are seeing more mixed outcomes. Conventional generation has also come back into favour. Congested interconnection queues, rising gas turbine costs, and long development timelines mean new baseload supply is scarce, supporting stronger recontracting terms for existing gas plants.
Repowering offers another important lever, allowing operators to extend asset life and boost output while avoiding many greenfield bottlenecks. While the opportunity across renewable IPPs was limited by a relatively young fleet, coal-to-gas conversions for conventional IPPs have been particularly attractive.
Separately, battery storage costs continue to come down which have improved economics of dispatchable solar, a potentially significant growth opportunity for renewable IPPs.
Utilities
While many of the themes explored on this trip overlapped with those from our October 2025 US trip, one theme that remains topical was affordability, particularly the relative positioning and messaging of gas utilities versus their electric counterparts.
Electric utilities are benefiting from strong rate base growth tied to data centres, electrification, and industrial onshoring, which has increased focused on affordability as stakeholders contemplate the flow-on effect to customer bills. Against this backdrop, gas utilities argue they are ‘flying under the radar’. The gas utilities we met, including AltaGas, Spire, ONE Gas, and Northwest Natural, consistently highlighted that average gas bills are typically two to three times lower than electric bills (on a per unit of energy basis). While companies naturally present themselves in the most favourable light (particularly when engaging with investors) and we do not rely solely on such messaging, the argument has merit at face value. With electric utilities likely to remain under regulatory pressure in the current environment, gas utilities with a strong track record of O&M discipline, supporting constructive relationships with regulators, may occupy a more defensive position heading into 2026.
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The content contained in this article represents the opinions of the authors. The authors may hold either long or short positions in securities of various companies discussed in the article. This commentary in no way constitutes a solicitation of business or investment advice. It is intended solely as an avenue for the authors to express their personal views on investing and for the entertainment of the reader.