Hello everyone,

This editorial is Chapter 70, LXX in Roman terms! Backwards it is 2XL which, coincidently, is my sweater size! Lol.  However, in all seriousness, it could be worse. I'm holding steady and so are markets. After a nice climb at the beginning of February, the S&P500 reached a high of 6147 but has since retreated to levels around 5990. If the index closes below rake (January's close) the S&P500 will have lost a measly 0.8% for the month of February. In retrospect, not bad really. February statistically as highlighted in my last editorial; is a month you don't write home about. It's also the same story here in Canada: if markets keep pace, the TSX will be off approximately 0.6% for the month of February.

This is not surprising though. Market participants are sitting back digesting the constant news from President Trump's administration and what it means for North America… Sorry, the world. What happens pending tariff's is anyone's guess but what I do know is that we move forward. A lesson I've learned from managing money in markets for at least the last 2 decades!

We live in a different world today than we did 4 months ago. What I believe, is that change is here, and change is something we're not comfortable with because it challenges us in every sense.  The good news? History has given us a path. It may not be a straight line up, but neither is the stock market. Lol. It's bumpy and sometimes scary, however, I'm a bit optimistic about our future here in Canada. I touched on this topic a little in January, but I'm going to dive a little deeper here to give us some hope pending the terraforming economic landscape.

In a global economy marked by trade tensions and protectionist policies, nations facing tariffs imposed by the U.S. must strategize and adapt to ensure self-sustainability and flourishing economic growth, which I know many of us are worried about. While tariffs may pose challenges to international trade, they also present opportunities for nations to reevaluate their economic strategies and leverage internal resources for sustainable development.

One effective way for a nation to mitigate the impact of tariffs is to diversify its domestic industries and reduce dependence on imported goods. By investing in and fostering the growth of industries that align with the nation's strengths and resources, a country can enhance its self-sufficiency and resilience to external trade barriers. This approach not only boosts domestic production but also creates employment opportunities and stimulates economic growth.

Moreover, innovation and technological advancements play a crucial role in enhancing a nation's competitiveness in the global market, even amidst tariff barriers. By investing in research and development, fostering a culture of innovation, and supporting technology-driven industries, a country can strengthen its position in key sectors and develop a sustainable economic foundation. Embracing digital transformation and adopting smart technologies can enable businesses to streamline operations, increase productivity, and adapt to changing market dynamics.

To support the said above, Canada has been actively diversifying its domestic industries, with a notable focus on the clean technology sector as part of its commitment to sustainability and innovation. Canada has recognized the potential of clean technology to drive economic growth, create jobs, and reduce environmental impact, while making it a key priority in diversifying our industrial landscape.

The Canadian government has implemented various initiatives to support the growth of the clean technology sector, including funding programs, tax incentives, and research grants. These investments have enabled the development and commercialization of clean technologies across different industries, such as renewable energy, clean transportation, and waste management.

Initiatives like the Clean Growth Hub (https://ised-isde.canada.ca/site/clean-growth-hub/en)  and the Innovation Superclusters (https://ised-isde.canada.ca/site/global-innovation-clusters/en) have facilitated knowledge sharing, technology transfer, and the scaling up of clean technology solutions.

Sustainable resource management is also essential for a nation seeking to achieve self-sustainability and to flourish despite tariffs imposed by other countries. By prioritizing environmental conservation, efficient resource utilization, and responsible land management practices, a nation can safeguard its natural resources, protect biodiversity, and ensure long-term economic viability. Embracing green initiatives, renewable energy sources, and conservation efforts can reduce reliance on imported resources and enhance resilience in the face of external trade disruptions.

Canada has implemented several initiatives and investments to advance sustainable resource management within the country (https://www.canada.ca/en/employment-social-development/programs/agenda-2030.html). The government works with partners and stakeholders to support the 2030 Agenda for Sustainable Development through actions related to poverty reduction, sustainable economic growth, reconciliation with Indigenous peoples, gender equality, and climate change.

One notable example is the investment of over $20 million towards initiatives that promote sustainable forest policy globally. This investment supports programs like Canada's Global Forest Leadership Program and the International Model Forest Network, focusing on sharing expertise and providing forest stewardship assistance(https://www.canada.ca/en/natural-resources-canada/news/2024/09/canada-supports-a-sustainable-future-through-20-million-investment-to-advance-sustainable-forests-internationally0.html).

Furthermore, Canada has made efforts to boost conservation and restoration endeavors by making investments into Indigenous-led natural climate solutions. For instance, the Unama’ki Institute of Natural Resources has received funding to conduct research on nature-based climate solutions and sustainable models for carbon-based projects in Nova Scotia (https://www.canada.ca/en/environment-climate-change/news/2024/01/canada-boosts-conservation-and-restoration-efforts-with-investments-in-27-new-indigenous-led-natural-climate-solutions.html) .

Through these investments and collaborations, Canada has taken significant steps towards sustainable resource management, demonstrating its commitment to environmental stewardship and advancing the cause of sustainability.

Building robust domestic supply chains is also crucial for a nation to navigate tariff challenges effectively and ensure a steady flow of essential goods and services. By integrating local suppliers, producers, and distributors into cohesive supply networks, a country can reduce vulnerabilities to external shocks, enhance product quality, and foster economic growth within its borders. Strengthening domestic supply chains also promotes job creation, supports local businesses, and enhances overall resilience in times of economic uncertainty. Hence the "Made in Canada" slogan or mandate that we've self-imposed.

This isn't something new. Canada has been actively working towards building robust domestic supply chains to reduce its dependency on global markets and enhance its economic resilience (https://www.globaltrademag.com/supply-chain-sovereignty-reducing-dependency-on-global-markets-in-canadian-manufacturing/. Efforts have been made to optimize Canada's supply chains, which are crucial in facilitating both domestic and international trade, ensuring the strength and resiliency of the country's economic infrastructure (https://tc.canada.ca/en/corporate-services/transparency/briefing-documents-transport-canada/2023/current-topics/optimizing-canada-s-supply-chains).

One example is the focus on supply chain sovereignty within the Canadian manufacturing sector. By creating a resilient, sustainable, and future-ready supply chain ecosystem, Canada aims to lead by example in building a robust domestic supply chain that can thrive in the face of complex challenges (https://www.globaltrademag.com/supply-chain-sovereignty-reducing-dependency-on-global-markets-in-canadian-manufacturing/).

In summary, I'm trying to provide examples of Canada's current initiatives and given the unintended push by America, demonstrate that opportunities are boundless right now. I've even talked to my kids about this, now is the best time in history to be an entrepreneur. Canadians supporting Canadians and I'm sure there are more Federal and Provincial initiatives yet to come. To some of us, this may be new but to financial markets, it knows this already and it's discounted in index. This is why the market gives me solace, it's an information processing machine, it's objective, it knows everything there is to know about the economic landscape. And right now, it's not in panic mode, it's in "tell-me-more" mode.

Until next month!