Good morning!
Friday was better for trade than for trading: Canada and Europe deepened their ties in a new alliance, while doubts about AI spending rattled stocks.
As Canada opens doors in Europe, Anthropic is eyeing more room in Alberta.
Let’s get into it.
MARKET RUNDOWN
Last Friday’s Close
Amazon’s cash burn and Intel’s weak outlook fuelled doubts about returns on AI spending, sending the Nasdaq down (2.9%) in its worst day since June.
Miners, hit by falling gold, and technology stocks led the TSX lower - also in its worst day since June - despite energy gains.
Bitcoin sank (5.3%) following Binance’s reported US$6.3B hack.
BRIEF OF THE DAY
Canada and EU Launch Alliance to Deepen Trade and Investment
The news: Canada and the European Union launched their “Alliance for the Future” strategic partnership in a joint statement issued on Friday at the 21st Canada-EU Summit in Montréal. It aims to deepen trade, investment, technology, and security ties as both seek to reduce their exposure to economic pressure from larger powers. U.S. tariffs and geopolitical uncertainty have accelerated the push to build more reliable relationships across the Atlantic.
Beyond CETA: Canada and the EU’s existing free-trade agreement, CETA, has applied provisionally since 2017, providing tariff preferences and regulatory cooperation. The new alliance seeks deeper industrial links through investment, shared infrastructure, and further efforts to reduce the regulatory barriers companies face when operating in both markets.
Key commercial announcements:
Critical minerals: A signed agreement with the European Investment Bank (the EU’s financing arm) creates a framework for loans, guarantees, and equity investments in Canadian projects, initially focused on critical mineral projects tied to defence and the energy transition.
Digital trade: Negotiations concluded on the Canada-EU Digital Trade Agreement, covering electronic contracts and cross-border data flows, intended to simplify doing business online between Canada and the EU. Formal signature and approval procedures remain.
Financial services and payments: A new joint working group will explore ways to increase cross-border investment and improve market access for banks, insurers, and fintechs. Separately, Canada and the EU will support work toward linking their instant-payment systems - Canada’s planned Real-Time Rail and Europe’s TIPS - to make cross-border transfers faster and cheaper.
AI infrastructure: Canada joined EuroHPC, an EU-led program of government-backed supercomputers hosted across Europe. Eligible Canadian researchers and businesses can apply for computing time on these powerful machines for demanding tasks such as training AI models.
Manufacturing: Canada plans up to $2.5B in financing through Export Development Canada (EDC) to help Calgary-based De Havilland expand production of waterbomber aircraft used to fight wildfires. European countries are existing customers, so the expansion would support Canadian manufacturing jobs while helping Europe secure more firefighting aircraft.
What comes next: Leaders aim to define the deeper relationship by the 2027 Canada-EU Summit, with Carney targeting June 2027. The proposed “associate member” designation for Canada remains undefined and was omitted from the joint statement.
💼 Why this matters: This alliance strengthens Canada’s push to reduce its economic dependence on the U.S. as tariffs make that relationship less predictable. More European customers and financing partners could support investment in Canadian mines, manufacturing, and AI, while helping Europe secure essential resources and industrial capacity from a trusted partner. The sovereignty objective is to give both sides more options over where they sell, raise capital, and obtain critical technology - reducing the ability of any single foreign power to disrupt their economies.
HEADLINE RECAP
In Canada
Carney Says EU and Canada Will Define “Deepest Possible Partnership” by Mid-2027 (RTRS)
Canada Is Drawing Inspiration From NAFTA as It Pursues a New Canada-EU Alliance (GM)
Carney Says No Hurry on Trade Deal if U.S. Won’t Offer Good Terms (BBG)
Trump Says U.S.-Canada Trade Deal Is “Very Close” After Talks With Carney (BBG)
Ottawa Designates B.C. Port Expansion as Project of National Interest, Marking the 2nd Project to Be Granted a Fast-Track Approval Process (GM)
Canada Economy Slows to 1.3% Pace, Weaker Than BoC Forecast (BBG)
Canada's Budget Deficit Over First 5 Months of 2026-27 Fiscal Year Almost Halves To $5.36B (RTRS)
Yukon Seeks Federal Funding to Shore Up Aging Power Grid (GM)
Anthropic in Talks to Lease a Proposed Massive Data Centre Campus Outside Edmonton; Would Mark Anthropic’s 2nd Canadian Data Centre Lease (GM)
Cohere Outlines Plans to Spend $4B on R&D and AI Infrastructure in Canada (TL)
U.S. Aluminum Industry Trade Group Urges North America to Align on Tariffs (BBG)
Canada National Railway’s (TSX:CNR) Strong Earnings Show Resilience Amid U.S. Tariffs (BBG)
Air Canada (TSX:AC) Shares Sink Amid Jet Fuel Costs, Lower Profit Outlook (BBG)
Loblaw's (TSX:L) Chairman Weston Fears Food Inflation Is Coming Back (BBG)
Bill Morneau, Former Canadian Finance Minister, Named as Next CIBC (TSX:CM) Board Chair (GM)
Ian Foucher, Canadian Finance Minister’s Ex-Chief of Staff, Named to IMF Board (BBG)
DEALS WITH CANADIAN PARTIES
M&A & Investments
Biossil: The Toronto-based drug developer agreed to acquire worldwide rights to Swedish biotech Alligator Bioscience’s cancer drug candidate mitazalimab for US$750K (~$1.05M) upfront, with up to US$108M (~$151M) in additional milestones, plus royalties.
Lepage Millwork: The Québec-based window & door maker agreed to acquire Québec-based Fenêtres MQ, a luxury brand serving North America with manufacturing in Italy, from Andersen Corporation.
Bow Valley College is negotiating to buy the City of Calgary’s former Central Library and police arrest-processing buildings, with plans to convert them into a ~316k-sq.-ft. healthcare training hub.
VC & Growth Equity
Bloomsco: The Montréal-based developer of AI-powered military training software raised $1M in pre-seed funding from BDC Capital’s Seed Venture Fund and Telegraph Ventures to expand its engineering team and adapt its platform for classified, offline environments.
ECM
Western Investment Company of Canada (TSXV:WI): The Alberta-based insurance holding company granted agents an option to place another 7.5M shares at $1 each, increasing its planned placement’s maximum size from $50M to $57.5M, to fund its acquisition of Canadian Farm Insurance and the Stockmens Insurance agencies.
Desjardins and TD were joint lead agents and bookrunners.
DCM & Credit
Enoch Cree Nation: The Alberta First Nation closed a $30M, 27-year loan from the Canada Infrastructure Bank to fund roads, water & wastewater systems, and other infrastructure supporting ~166 new homes on reserve lands near Edmonton.
Asante Gold (TSXV:ASE): The Vancouver-based gold miner operating in Ghana obtained an extension of financing waivers, moving its deadline to secure at least US$100M in new funding to November 30 from October 31; the company continues to evaluate funding alternatives.
BAY STREET TRIVIA
The name of which Canadian apparel company was created by combining the names of two of its salesmen?
FOR THE GROUP CHAT
