“I think the Canadian voter is demanding bold, structural changes. Which means whether you’re Trudeau or Poilievre, you have to actually effectuate those structural changes,” Grewal says. “In English, that means deregulation. The market loves deregulation and I think this has lit a fire under Canadian pride and our understanding of the economy. In a strange way I think this moment could potentially be unifying.”
One of the sources of Grewal’s optimism is in the various Canadian competitive advantages which he believes were neglected over the past 10 years. Many of those advantages can be found in natural resource sectors. Amid a global nuclear resurgence, Canadian uranium may prove a significant driver. Potash, natural gas, and oil resources are all economic standbys with huge potential amid surging global demand for resources.
These are also some of the resources and sectors unlikely to be subject to a potential Trump tariff. For all the bellicose rhetoric we hear from the President Elect, it’s notable that these resources are key cost inputs for many US consumer goods — not to mention the importance of Canadian oil in keeping US gasoline prices low. Given the role inflation played in Trump’s recent election win, it may be unlikely his incoming administration imposes tariffs on those key resource sectors. Counter-intuitive as it may appear, Grewal believes that investment in these resource sectors may result in deeper integration with the US.
That is not to say Grewal believes Canada should simply return to its role as the ‘hewers of wood and drawers of water’ for the United States. Investments in research, technology, and more specialized industries are key, but he argues that these investments should be tied to those natural resource sectors, letting them function as the engine for investments in innovation. Moreover, Grewal notes that Canada has lost market share in the energy tech, uranium tech, and other resource tech subsectors. He contrasts this experience with Scandinavia, where a similarly large forestry sector was buttressed with forestry tech investment. The heart of forestry tech is now in Scandinavia.
From a client service standpoint, Grewal has to take his economic outlooks and optimism and translate them to a client base who are now just worried about their operating businesses and their currency exposure. He notes that risk management is a core element of Forthlane’s business and that the team’s leadership pulls from experience in the pension industry. That experience has focused them on capital preservation, resulting in portfolios with greater global diversification and exposure to negatively-correlated assets.
