By Dean Brown.

Follow Dean: Instagram · TikTok ·

Facebook · Support my work☕

$XIU.TSX ( ▼ 0.52% ) | $SPY ( ▼ 0.23% ) | $QQQ ( ▼ 0.65% ) | $DIA ( ▼ 0.03% )

Good morning.

Where did August go? Like, really. It feels like the month started five minutes ago and somehow we’re already heading into Labour Day weekend.

There’s a lot happening This week but three stories stood out to me. The U.S. keeps changing or clarifying its explanation of the failed trade deal, Canada just posted a surprisingly strong economic quarter, and Trans Mountain is already nearly full.

Let’s get into it.

The American explanation for why negotiations collapsed has shifted all week.

Howard Lutnick says the French language issue was essentially manufactured by Canada, while U.S. Trade Representative Jamieson Greer says it was discussed, but was nowhere near a deal breaker.

Ottawa now says the U.S. is withdrawing its objections to labelling and discoverability rules, including measures designed to promote Canadian and French language content online.

That still leaves us with two very different stories.

Canada says Washington changed important terms late in negotiations, including on autos and Canada's ability to protect its own policies. Lutnick says the two sides had a deal and Canada suddenly introduced new demands because Carney wanted to walk away for political reasons.

Without the actual negotiating documents, we simply cannot know which version is complete.

What I’m watching now is whether Washington starts backing away from or clarifying the other disputed demands. One issue changing does not mean negotiations are restarting, but if more start disappearing, that tells us something about how far apart the two countries really were.

Statistics Canada says the economy grew at a 3.3% annualized rate in Q2, the strongest pace since early 2023.

That does not mean Canada literally grew 3.3% between April and June. Actual quarterly growth was 0.8%, which is then annualized to show what that pace would look like over a full year. Statistics Canada’s full report has the breakdown.

There were some genuinely encouraging numbers underneath it. Exports jumped 3.6%, auto exports rose 27%, household spending increased and GDP per person grew 1%.

And yes, oil helped. Higher international oil prices lifted energy exports, export prices and corporate income, but this was broader than just an oil boom.

The thing is the timing.

These numbers cover April through June, before the latest trade negotiations collapsed and before the newest tariffs.

So I think the better takeaway is not that Canada's economy is suddenly booming, but that it entered this next stage of the trade war in better shape than many people expected.

The next AI trade may not be another chatbot.

It may be surgical robots, automated warehouses, smart factories, and machine vision systems already reshaping how companies operate.

MarketBeat’s new 7 Stocks to Buy Before the Robotics Revolution report reveals seven companies positioned across the automation boom, from robot builders and AI chip leaders to machine vision providers and factory automation giants.

This is where AI gets a body.

And as labor shortages, wage pressure, and supply chain stress push more companies toward automation, these stocks could move before the robotics story becomes impossible to ignore.

The report normally sells for $29.97, but it is free for a limited time.

Send My Free Report

Canada is in an escalating trade war, businesses are dealing with tariffs and investment uncertainty, yet the big banks are reporting some very strong numbers.

Scotiabank made roughly $2.95 billion this quarter, BMO reported about $2.86 billion in adjusted profit, and their capital-market businesses were particularly strong. CBC has a good breakdown of the results here.

But economic uncertainty can actually create business for banks. Companies suddenly need financing, currency hedging, restructuring advice and help managing interest-rate or commodity risk.

BMO’s capital-markets profit jumped 45%, while Scotia’s global banking and markets income rose 37%. Just as important, BMO actually set aside less money for bad loans than it did a year ago.

That doesn’t mean Canadians are suddenly doing great. These results only run through July 31, before the newest tariff escalation.

The number I’d watch over the next few quarters isn’t bank profit. It’s credit losses. If businesses start failing, unemployment rises and borrowers begin missing payments, that’s where the damage should start showing up.

Trans Mountain averaged roughly 840,000 barrels per day in Q2, putting the expanded pipeline at about 94% utilization.

It also returned $450 million to Ottawa through interest and dividends during the quarter. That does not mean taxpayers have recovered the enormous cost of the project, but it does answer one of the old questions about whether Canada would actually have enough oil and customers to fill it.

And this is going to fuel the argument for the other pipeline projects now being proposed. Trans Mountain itself is looking at adding more capacity, while a much larger new Alberta to Pacific pipeline is also being discussed.

The trade war makes that argument even easier to understand: Canada cannot seriously talk about selling more oil outside the United States if we do not have enough infrastructure to reach other customers.

That does not automatically make every new pipeline a good investment. But the debate has definitely changed from “Will we even fill Trans Mountain?” to “Do we already need more capacity?”

Here’s more on the expansion debate from Reuters.

Alberta went from forecasting a $9.4 billion deficit to a $2 billion surplus in a matter of months. Higher oil prices added billions in expected resource revenue, producing an enormous swing in the province’s finances.

That’s the upside of Alberta’s energy wealth, but also the risk. A global oil price the province barely controls can completely change its budget.

Trump ordered the U.S. federal government to start calling Lake Ontario “Lake America.” Canada obviously doesn’t have to follow along, and the internet immediately started offering alternatives of its own, including renaming Canada geese “Donald Ducks.”

For clarity, Donald Ducks is an internet joke. Trump did not actually rename the birds.

Ottawa is putting $504 million over eight years into 64 new research chairs, with many recruits coming from top American institutions. The federal program gives Canada a chance to take advantage of uncertainty in U.S. academia.

The bigger challenge is turning those researchers into Canadian patents, companies and jobs rather than doing the research here and commercializing it somewhere else.

Saskatchewan says major new data centres will need new electricity generation rather than simply taking capacity from the existing provincial grid.

I like the logic here. The province wants the investment, but doesn’t want households and existing businesses competing with enormous AI facilities for power.

Canada Post lost $277 million before tax in Q2, although that was better than the $407 million loss a year earlier.

The fundamental problem hasn’t changed: letter mail keeps declining while Canada Post still has to maintain a national delivery network and fight private carriers for parcel business.

Your store is full of hidden growth opportunities. StoreClaw analyzes your Shopify and Amazon data, identifies the highest-impact actions, and helps you grow revenue while improving margins. Start free today with 10,000 bonus tokens. No credit card required.

Try it FREE today

I’ve noticed a lot of chatter about Ottawa releasing the sensitive documents or draft terms from the failed U.S. trade negotiations.

I even understand why people want to see them. I’d like more transparency too. But I also think we need to be realistic about what would happen if they were released.

People who already believe Carney made the wrong decision are probably going to search through every page looking for something that confirms it, while people who support the decision will do the opposite.

From everything we know so far, I don’t think Carney was choosing between a good deal and a bad deal. He was choosing between a bad deal and a worse one at the last hour.

The bad deal may have bought Canada more time and temporarily reduced some tariffs. But if the price was accepting restrictions that weakened Canada’s ability to make its own trade decisions, protect certain domestic policies or build relationships with other countries, then that extension comes with a cost too.

That’s why I’m less interested in whether Canada could have gotten a deal and more interested in what Canada would have had to give up to get it.

And that’s ultimately the question Canadians should be judging.

Would you still want Canada to sign the deal if it lowered tariffs but limited some of Canada’s future trade decisions?

Hit reply and tell me where your line would be.

Until Monday,

Dean