Good morning!

Protection comes in different forms today: Canada and Ontario are helping shield factories from U.S. tariffs, while SoftBank is reportedly in talks to buy La Caisse-backed security services giant Allied Universal.

Other pension funds also kept busy, with new deals from CPP, OMERS, and PSP.

Let’s get into it.

MARKET RUNDOWN

Yesterday’s Close

Strong SpaceX earnings and AI infrastructure company Super Micro’s upbeat sales update eased concerns about returns on AI spending, helping the Nasdaq lead U.S. stocks higher.
Financials led the TSX higher, with expectations that Canada and Ontario’s newly announced $8.7B support package for steel, autos, and critical minerals would generate more projects to lend to for banks.

BRIEF OF THE DAY

Canada and Ontario Unveil $8.7B for Steel, Autos, and Mining Infrastructure Amid Tariffs

The backdrop: Ontario’s steel and auto industries rely heavily on U.S. buyers. Tariffs are making Canadian products more expensive in the U.S. (e.g., 50% tariff on steel, 25% on autos), putting factories and jobs under pressure. With trade talks currently stalled, Canadian governments aim to protect those industries while helping domestic companies sell more at home and abroad.

The news: Prime Minister Mark Carney and Ontario Premier Doug Ford announced a multi-year $8.7B government funding package for steel and auto production upgrades, alongside roads to support future critical mineral mining. The commitments’ full terms - including how much recipient companies would need to repay and the split between new money and existing programs - remain unclear.

For steel: The governments committed $5.2B over 5 years through a “Joint Steel Action Fund” to help steel mills upgrade equipment and make more of the steel products that Canada currently imports for defence, energy, and infrastructure projects.

For autos: The governments committed an additional $2.5B over 2 years for new equipment and upgraded production lines, including EV manufacturing. Canada will also keep emissions limits for new vehicles at 2026 levels through 2029, giving automakers more time to shift toward EVs and more fuel-efficient models.

For critical minerals: Canada pledged up to $1B over 3 years - matching Ontario’s earlier $1B commitment - for roads into the Ring of Fire, a remote mineral-rich region in northern Ontario with deposits like nickel (for EV batteries) and chromite (for stainless steel). Road access could help new mines open, giving Canadian manufacturers more domestic sources of raw materials and reducing their exposure to foreign supply disruptions.

❝

💼 Why this matters: The funding package signals that Canadian governments are preparing for U.S. trade barriers to last. They’re betting that public funding can encourage domestic companies to keep investing in Canada while building a customer base less dependent on U.S. buyers. The longer-term test is whether those companies can win enough business at home and in other markets to remain competitive after government support ends.

HEADLINE RECAP

In Canada

BMO expands defence push through new Canadian defence chair; CEO calls on Canada for government-backed risk sharing to boost defence financing (GM)
Canada and EU to define scope of new associate membership framework by 2027 (BBG)
Canada to host China’s vice premier in Vancouver for talks on expanding financial services ties (BBG)
National Bank CEO calls for scrapping Canada’s tax code and starting over (BBG)
BHP chair points to Canada’s mine development tax incentives as model for attracting global investment, in call for Australian reform (RTRS)
Canadian heavy crude discount widens to US$28 as oil sands supply surges and Venezuelan barrels return (GM)
Build Canada Homes housing agency vows to keep building through housing downturn, with 19,000 units funded (BBG)
Canada takes Statistics Canada and other government sites offline over critical PHP security vulnerabilities (BK)
Food bank visits in Canada hit record 2.35M monthly visits, up 117% since 2019 (GM)
Canada signs $20M deal with NordSpace for military access to Newfoundland spaceport for sovereign military launches (GM)
Teck Resources (TSX:TECK.B) workers threaten Saturday strike at Canada’s largest copper mine (BBG)
Vancouver-based pulp producer Mercer International (NASDAQ:MERC) weighs Chapter 11 bankruptcy filing (BBG)
EA shuts down Edmonton-based game developer BioWare as part of 400-job cost-cutting plan (TL)
Police raid Quebec-based EV maker Lion Electric’s headquarters in investor fraud investigation (GM)

DEALS WITH CANADIAN PARTIES

M&A & Investments

CPP Investments and OMERS: The Canadian pension funds agreed to sell their entire respective 33.9% and 30.0% stakes in Associated British Ports, the U.K.’s largest port operator, to IFM Global Infrastructure Fund in a deal reportedly valuing the business at £10B+ (~$19B+).
CPP Investments is co-investing alongside PE firm EQT and sovereign wealth fund ADIA in the €9.6B (~$15.2B) take-private of molecular diagnostics company QIAGEN (NYSE:QGEN).
Allied Universal, the security services group backed by La Caisse and PE firm Warburg Pincus, is reportedly in early sale talks with SoftBank that could value it at up to US$18B (~$25B), excluding debt.
PSP Investments and investment manager Nuveen Real Estate launched a U.S. retail real estate JV with an initial US$790M (~$1.11B) portfolio of 19 open-air shopping centres across eight states.
Cancoil: The Ontario-based heat transfer & refrigeration manufacturer agreed to be acquired by Trane Technologies (NYSE:TT), which already buys Cancoil’s components.
- Lazard advised Cancoil.
Organika: The Vancouver-based supplements & wellness company received an investment from healthcare-focused PE firm Archimed, marking the first deal from its €1.5B MED IV fund.
Wildboy Holdings: The BC natural gas business was acquired by Olenox Industries (NASDAQ:OLOX) from Wildboy Industries, primarily for Olenox preferred shares.
Lumi AI: The Toronto-based enterprise analytics platform, which lets businesses query their data in plain language, was acquired by construction industry software provider Newforma.
Arcanus Aerial Systems: The Toronto defence technology company agreed to acquire Ontario drone manufacturer Nested Technologies and its distribution, training, and support partner Infinit Drones.

VC & Growth Equity

Hive: The Kitchener-Waterloo-based live events marketing software company raised a US$27M (~$38M) Series B from Frontier Growth, with most of the investment used to acquire secondary shares from existing investor Avenue Growth Partners.
Azoma: The Toronto- and London-based platform helping brands appear in AI shopping recommendations raised US$11.2M (~$16M) in Series A funding led by Puma Growth Partners, with participation from MaRS Investment Accelerator Fund, dunnhumby, and Twin Path.

ECM

Algoma Central (TSX:ALC): The Ontario-based marine transportation company upsized its financing of 6.20% convertible debentures due 2031 to $90M (from $62.5M), comprising a $70M bought deal and $20M investment from controlling shareholder E-L Financial; proceeds will fund new vessel investments and M&A.
- CIBC led the bought deal.

DCM & Credit

Scotiabank (TSX:BNS) announced a US$1.25B offering of 5.14% covered bonds due 2029.
- Barclays, Crédit Agricole CIB, Deutsche Bank, Scotiabank, and TD were joint bookrunners.
Hudbay Minerals (TSX:HBM): The Toronto-based copper miner agreed to increase its senior secured revolving credit facilities to US$700M (from US$450M) and extend maturity by 2 years to 2030; the added liquidity will support its Copper World project and help manage its 2029 note maturity.
Oxford Properties Group: The Toronto-based real estate investor announced a $400M offering of 4.517% Series 5 senior unsecured notes due 2031.
- CIBC, RBC, and TD were joint bookrunners.
Province of Newfoundland and Labrador announced an additional $500M of its existing 3.90% bonds due 2036, bringing total outstanding to $1.5B.
- TD led the offering, with CIBC and Scotiabank as joint lead managers.
University of Saskatchewan announced a $250M offering of 5.288% bonds due 2066 to fund systems modernization, expanded learning spaces, and research infrastructure, including nuclear medicine capabilities.
- RBC was sole bookrunner.
BMO (TSX:BMO) announced a CHF175M (~$298M) offering of 1.4425% callable notes due 2032, with the notes first callable in 2031.
- BMO, Commerzbank, and UBS led the offering.

Private Funds

Anson Funds: The Toronto-based hedge fund is launching Anson Vira, a dedicated North American TMT small- and mid-cap activist fund, with US$200M of seed capital from Anson and additional outside capital being raised.

BAY STREET TRIVIA

Which Canadian billionaire business dynasty’s rise began with a struggling bus company in Sudbury?

FOR THE GROUP CHAT

💼 Canada's $8.7B Answer to Tariffs