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Welcome to Economic Impact. We are March 18, 2026. Stéfane, thank you for being here today.

Nice being here.

Yes. So, before we start, I think it's important to note that the last time we spoke, which was a couple of weeks ago, the events in Venezuela had just occurred. And today, we are faced with a conflict in the Middle East that is also impacting the discussions we're going to have today. So, first and foremost, I want to say that our feelings are with those populations that are touched by this conflict. But also, it's important for us to understand what will it mean for our Canadian investors who are listening to this podcast today.

Yeah, we forget how lucky we are being far from.

Absolutely.

Armed conflicts, right? It's a human tragedy. But to put things in perspective, we're going to speak to an oil price shock. It is the first one, almost day-to-day since the one that was incurred in 2022.

Yeah it was February.

February 2022, Ukraine invasion. So, right now as we speak now today, because I don't know what we'll end today, so we're at about $100 a barrel. 2022, we went as high as $130 a barrel. Again, this is expressed in 2026 dollars Nancy.

So, we can actually compare.

Yeah, so if you want to put some perspective on what the oil shock of the 1970s looked like, it was $160. However, this oil shock emanating from the Middle East is the first one since 1990-91, and it's impacting the Strait of Hormuz. We don't fully understand how the global supply chain will be impacted. All I can say at this point in time, $100 may not be recessionary, but it will have an impact on growth in the coming quarters and earnings expectations.

Absolutely. And it's important also to put that in context because we're not always starting from the same base, right? So, help us understand. So, you're right, when economists say "I know for sure what the impact". No, it depends where you are in the cycle. So, back in 2022 when the oil price hit, inflation was already at 8.5%. So, the Fed had no choice. They had to react to this by starting a monetary tightening campaign that took us all the way through 2023.

We all remember.

Long-term rates also increased. The good news from a cyclical perspective is that this oil shock is hitting when inflation is around 2.5%. So, I don't foresee an aggressive tightening cycle because of it. But it remains to be seen what type of pasture, how long the war will last and the impact that we'll see also on financial markets. So, but so far.

So good. And we saw this morning that Bank of Canada did not move the rates. We're waiting to see for the United States this afternoon. But, you're fairly confident that they won't move.

Oh, they won't, they're not going to move out because back in 2022, job creation in the U.S. was averaging roughly 400,000 people a month. Right now, 0, Nancy, for the past six months. The unemployment is at 3.4%, now it's at 4.4%. The Fed has a dual mandate. They're not going to hike at least in the first half of this year. We'll see the second half because don't forget, we don't fully understand the potential pass through from previous tariffs that were announced by the White House. And they're still in the protectionist agenda emanating from the White House, so we have to see on inflation. The U.S. is more uncertain.

And what's the impact on the markets?

Well, I'll give you a combination of rate hikes with an oil shock like 2022. Not good for markets. After three months, you were down 5.1% back then and after 12 months you're down 18%. There was a lot of volatility. You had to pick where you were going to invest. After three months in 2022, the Canadian market was one of the only ones that were up. Year to date, we're at 3.1%. We're again showing some resilience. The U.S. is down. Again, this is not big correction, but I just want to speak that, you know, even after three months, it was a very small correction, but it got worse because of the combination of higher oil prices, but also a very aggressive tightening campaign. We're not there yet, but we'll see what the impact on the global supply chain will be from shutting down the Strait of Hormuz, which is more than just crude oil, right?

Definitely. And it's. Oh my gosh.

LNG.

There you go. Thank you.

Sulfur.

Sulfur. That's was, that's the real one.

Helium.

Yes. And this did not exist back then, so those are all new importations.

You forgot a key one. Aluminum.

Aluminum, oh.

That's a big deal. That wasn't there back in the 1990s. So, that's the manufacturing supply chain being impacted more significantly than the 2022 oil shocks. So, people that say exactly, they know what's going to happen. We don't know. We don't fully understand. It really depends on how long the Strait of Hormuz is shut down.

And if we go to our traditional total return graph.

Yes.

How do we compare? We're still.

Still true, we're still doing well. This is a Canadian dollar total return. So, emerging markets are still up. We're resilient and the reason we're holding up so well, Nancy, has to do with the nature of our trade balance. And what it shows here is that compared, if you compare the Canadian dollar to the rest of the other reserve currencies, we are the country that runs the highest energy trade surplus.

And our oil production has improved. Put that again in context for us.

So, people will say, "Okay, are we running a higher trade surplus just because prices are increasing?". Of course, some of that is true. But people forget that since 2022, despite the fact that we've added very little infrastructure, there's been some innovation in the pipeline industry that has allowed Canada to go from 4.8 million barrels a day to roughly, where are we here, 2026, almost 6 million barrels a day. So, we've added more than 1,000,000 barrels a day. Again, yes, TMX was opened recently, we went from 300 to 800,000 barrels a day, but.

Still, there's innovation.

Innovation in the existing pipelines going to the U.S. means that we're shipping more. So again, people have the perception maybe it's not such a bad thing to be an energy superpower and being able to have the allies. And I think Ottawa is having, you know, maybe changing its mindset perhaps on that one. We'll see in a second half of this year.

And the last conversation we had, one of the themes was gold. So, can you update us on gold?

Okay. So yes, you're right. S&P TSX resilient because of oil and gas, but gold is important because the market cap of gold stocks, as we showed last month, was just as important as the energy stocks. So, in 2022, I have bad news for you, Nancy. The U.S. dollar shot up because of the Fed tightening and gold prices were down 20%. Now, will history repeat itself in this cycle? I'm not so sure. I'm more confident that the U.S. dollar will not appreciate because I'm sure people are more suspicious about the White House. They're unlikely to buy U.S. Treasuries as aggressively as they did back in 2022. So, year to date, all I can say is gold prices are actually behaving a little bit better than it was in 2022. We'll see in the coming months. But, I still think that the Canadian dollar will be more resilient because less people are inclined to buy U.S. Treasuries, so I don't think we'll have a repetition of what we saw in 2022.

And that's good. And again, last conversation we had, we were looking at our Canadian population, so I don't think fresh from the press, you don't have good news for us.

So, even though we've shown some resilience on the stock market. Well again this year the stock market is doing better than the economy and the primary reason is that our population is contracting. So, this came out this morning by the way. You know, last quarter people said that might be the worst that we'll see contraction of 80,000 people on the quarter. No, this quarter was 100,000 people. So, on a year over year basis, believe it or not, we're down 100,000 people. It's not much because we have 41 million population. It's 0.2%, but yet it's the first annual decline in Canada's population since the Confederation in 1867. Yeah.

And we can understand why. I mean we slowed down the immigration, our population is getting older. So, in the short term it might not be so bad because we had housing problems last year as you know. But definitely we'll have to make sure that we inverse this so that the industry, the entrepreneurs really have what they need to produce.

I think Ottawa needs to optimize its immigration policy. I think this is a bit too aggressive. We'll see in the months ahead. So far it's mostly hitting the student population because permanent immigrants, they were actually up 80,000 on the quarter. So, not so bad for industries, but for some universities etcetera, colleges, it's another story. So, it's not overall bad in every facet of the immigration policy but I still think this is a little bit too aggressive. So. And that's putting downward pressure on the housing market. But, the silver lining is that if your population's not growing, your inflationary pressures are not as bad, right?

Yeah, there's always a balance somewhere. And so, tell us about the inflation.

Below target. We're below 2%. There are only a few countries like that. Imagine that. We're a big energy producer with inflation below 2%. Yes, there were some policy impacts on all of this, but all I'm saying, Nancy, as the central bank attempts to navigate the oil shock, at least in Canada, we have a little bit more leeway to be patient compared to the U.S., which is at 2.4%. Nonetheless, the critical part is to understand what the Strait of Hormuz will mean to the global supply chain. Profit expectations. Remember what we said last month. People are so optimistic.

Double digits everywhere.

I think downward earnings revision is possible. So, be prepared for volatility in the coming weeks and coming months.

Okay, well, thank you so much, Stéfane. And if you are worried about volatility or, you know, what's the impact on this on your portfolio, well you know you have the chance to call your advisor and see what this means in your reality, because emotions and a three-month period are never a good guide. So, I invite you to contact your trusted advisor to have your health check, financial health check. So again, thank you Stéfane. Thank you to all of you and we'll see you next month.

Hello everyone, welcome to Economic Impact. We are Wednesday, February 18th, 2026. Stéfane, great to see you again.

Nice to see you.

What a week and we're only Wednesday.

It's a big week for Canada.

I know it's an amazing week for Canada. So before we start, the last time, I think we're going to do it every call because I love this. So, all the little brackets were on the right side of the line. So, can you tell us what happened in the last not even 4 weeks?

So, we had positive returns when we saw each other last month.

Yeah.

The year is still young, obviously, but it's actually more positive than it was last month. And notice, Nancy, positive for everyone except maybe 1 market, the U.S., which we'll speak to, but notice that, you know, everything related to the reflation trade that we spoke to last month shows positive returns. Emerging markets, the S&P TSX, Europe. So, all in all, it's still this concept that earnings are likely to accelerate this year with higher commodity prices.

And as it was in 2025, it's still very concentrated the investments that are being made. So, you have a slide that's very interesting about AI.

Well, what happened last year and what people said, well, okay, AI, if you look at the hyper scalers, they're investing a formidable amount of money in this. And for 2026, the investment plan is more than $680 billion. That's only four companies Nancy. So that would account for roughly 2.1% of GDP with just four companies.

Wow.

This has never been seen before. If you want to make a historical comparison to other big projects in the U.S., if you go back to 1850-1859 when they built the railroad system in the U.S., they were spending 2.2% of GDP all these companies put together. If people want to compare it now, the AI cycle versus the Internet cycle, well the Internet cycle was consuming 0.8% of GDP annualized. So the 2.1%, these people, are they spending too much? Will this be a fuel, a Dutch disease where the AI sector is taking all the capital and with diminishing returns? So, that's what we're seeing this year a little bit more concerned. So, when I said the US dollar, the S&P 500 was down year to date, it's mostly because of IT, because look at everything related to what we spoke to last month. U.S. reindustrialization, rebuilding the electrical grid, all these sectors are up 16, 21, 12%. So, it's a big sector rotation happening within U.S. equities.

So that means markets are thinking that this reindustrialization will work. That's what we're seeing here.

Yeah. And, and as you said before, and as you've told me before, does that mean the AI cycle is dead? No, but everyone was overweight AI coming into 2026. So, it's a sector rotation given the question marks regarding the profitability that was promised, will they deliver this year?

Yeah. And last time we spoke, we spoke about gold. So, I think it's going to be a subject of this conversation again today.

Oh, we have to because, so anything related to the energy sector, materials, industrials doing good in U.S., Canada, energy is doing well. If you're going to deploy, we spoke about it, you want to deploy AI, it's energy intensive. So, a big increase here. Notice materials however, it's up 18.3% and it's having a formidable impact on both our economy and the perception of what's really happening in the economy is being, I think, biased by gold. Let me explain. A lot of people are saying well Canada is finally diversifying out of the U.S. We have found a formula to diversify. Look at the exports to U.S. down 10%, which has never been seen outside of recession and non-U.S. exports are up 20%.

So, who's our new friend?

Well people are asking me name countries that are our new friends and I can't find any, Nancy, because it's not a friend, a country friend per se. It's really one commodity that is our best friend right now. It's gold prices at roughly $5000 an ounce. If you go back to 1791 and you price gold in 2025 dollars, that's well above the historical average of $650.

So, there's a funny story about the $650. So, talks about men’s suits. So, you want to tell us about it? 

Well, I can't, you know, I can only speak for men’s suit, unfortunately, on that one. But historically, people have associated the-.

The ounce?

Yeah, the equilibrium value of gold, 1 ounce of gold should be equal to your ability to buy a decent suit if you're a man. So right now, as you can see at $5000, those men at home that have a lot of, you know, some ounces of gold.

A lot of gold can have a very nice suit.

Or they can go shopping for many suits.

Yeah and 650 you can still have a reasonable suit in Canadian dollars today, right?

So, the point is we're well above the historical average. Last time we were there was 20 years ago. You can remain above 650 for quite some time. The geopolitical complex or backdrop is supportive of gold prices, but it stretched. So, our view for the next 12 months or so, it's a target range for gold of four to five, 6000. So, it might be volatile, but we're not collapsing it because we know the central banks are buyers. So, there is still some support and U.S. dollar is still set to depreciate.

And so, without gold, what would we look like?

Well, it really shows that we don't have really good friends right now, new best friends, because the reality is our trade balance is a negative, a deficit of $30 billion right now for Canada. If you were to exclude gold or surplus on gold, which is driven by prices, our trade balance would be a deficit of $80 billion, two and a half times greater. See how important that is? Because that's supporting the currency, it's supporting the stock market and it's supporting our exports.

Yeah. So, gold takes over all the other categories now. It's never seen before?

Well, if you think this is interesting, well, at least the next one, which shows that the market capitalization of gold stocks surpasses energy for the first time ever in Canadian history. So, that speaks to the importance of gold because that's been a key driver of the S&P TSX. So, gold is still popular with investors going into 2026 because a lot of people were not overweight gold. So, there's some catch up there. You have to go back to neutral. So, it is supportive and as I said, the backdrop is supportive, but it's important to tell our clients that this is a stretched.

Rebalancing, diversification. Those are the principles, right?

It's a crowded trade. Doesn't mean that you don't remain crowded for a while, but be wary of how gold is impacting the economy and the stock market.

So, we have a couple of minutes left. Can we talk about the announcement from our Prime Minister, Mr. Carney?

Okay so we need to find new friends, right?

We do.

And one way. So in order to find new friends, we need to reindustrialize and we have spoken to that last month or in previous discussions. And the reality is that was the big news that came yesterday where the federal government is pledging to spend billions of dollars in order to find us new friends. How do we do this? By reindustrializing. And, it's a big deal, Nancy, because it's the first time that I can recall in many years that we're deploying in industrial strategy based on our defence spending with a procurement system that might favor our domestic corporations. And you know what? It's so big. And the money spent, 5% of GDP. We haven't seen this since the Korean War. It might entice people to come from overseas.

And invest.

And invest here in Canada with a transfer of intellectual property to actually build stuff in Canada to benefit, obviously.

Our economy.

And the manufacturing sector, right?

And therefore, if we are investing, all of this will create jobs. We'll create good jobs. How does it look right now?

We need jobs.

We need jobs.

Yeah, well, it depends where you live. But really the reality is Quebec and Ontario, who are mostly or the biggest manufacturing hub in the country, have seen disappointing job markets. So, full time jobs, they're barely up in the territory, they're down in Quebec, but total employment is down in Ontario. So, out West, if you want to look at the four large provinces, in order to simplify the chart, there's a regional divergent so you can see who's being hit with the uncertainty about the manufacturing sector. Hence the importance of this plan that was unveiled yesterday. Finally, we are willing to reindustrialize and that's how we make new friends.

Well, Stéfane, thank you for this great conversation. Looking forward to next month, there's going to be a lot of things happening, I'm sure. Thank you for all of us for attending this little conversation, and we'll see you again next month.

Hello everyone and welcome to Economic Impact. We are December 9th, 2025. First, I want to say a big thank you to my colleague Denis Girouard, who was the lead of this little video for more than two years. And I also want to thank him because he was, for more than 30 years, a strong pillar at National Bank. So, Denis, happy retirement and thank you for everything that you did. So, I'll take a minute to introduce myself. I am Nancy Paquet, Head of Wealth Management at National Bank, and I have the privilege of having this conversation with Stéfane Marion today. Stéfane is our Chief Economist as you know him. So, Stéfane, what can you tell us about 2025?

Well, I thought since you're here with me this morning, Nancy, that I would start, Wealth Management would start with the returns that we've seen across different asset classes so far. The year's not over Nancy.

Yeah, two weeks, but still, everything is positive.

Everything is positive, so everything is in the black, you'll be happy about that. And notice the performance of the Canadian stock market.

Wow.

Who would've guessed?

Who would've guessed in January when it was the first day of the American new presidency and we were so worried and not knowing really what was going to happen. This is amazing, but how can this happen?

Well, if you put some historical perspective on this 30%, it's, you know, we're looking and there's still possibility that we could chase, you know, beat the record that we saw in 2009, Nancy. But I think it's a reflection of resilience in equity markets. Yes, gold prices were up, but also banks did very well. But banks won't do well if the economy doesn't do well. And I think one of the most surprising factors, the stock market was surprising, but every stock market in the world finished a year in positive territory, but what was surprising is the performance of the economy where the unemployment rate, as of last Friday, the day that was published shows that the jobless rate in Canada is now lower in November than it was at the start of the year and we went through a very scary period here, over 7% and now back at 6.5%.

But hopefully this is the beginning of a trend and not just a statistic hiccup. So, do we know the quality of those jobs? Because that could have a major impact.

It's a good question. Maybe it was the people that just left the labour force. So, it's not a quality reading on the jobless rate. So let me reassure you, Nancy.

Oh, that's good.

More than 380,000 jobs so far in 2025, mostly full-time. That's great. Well-distributed private, public sector, mostly private this time around, which is good news and concentrated in industries that pay more than the average across industries. So, all in all, a good structure to support the economy.

Good. Looking forward to seeing the next graph next, in a month when we're going to do the next video because it would be amazing that it really is the beginning of a trend.

Yeah, well, be careful. It's super volatile. But I have to say the past three months have been surprising. So, even if we, finishing a year below 7% on the jobless rate was quite an accomplishment and with these types of full-time job creation, I think is supportive and brings us hope for 2026 that the economy shows resilience at the end of this year was good news.

So, we saw the markets doing well. We saw the unemployment rate going down and tomorrow, we're Wednesday, with the announcement of Bank of Canada. So, what do you think?

They can't lower rates. They're going to stay put. U.S. will drop rates, but not Canada. The economy is doing somewhat better, inflation’s about target, but nonetheless you can't justify reducing rates at this point in time. So, the Bank has done a good job. They were pre-emptive. They were concerned about the economy. Now they posit, Nancy, and we'll see what happens in the next few months. But for now, I think suffices to say that you remain on the sidelines.

Okay, so all of this should lead to our snowbirds being happier. Is the dollar improving so that they can go South and enjoy the sun?

Yes, snowbirds will be happy, but also people that try to have a forward view or longer-term view on Canada because I think the currency is less susceptible to a decline given the macro backdrop, but also what the federal government has deployed in recent weeks in terms of budgets. But also, you know the Memorandum of Understanding with the U.S. The Alberta sorry. So Canadian dollar has gained 3 cents. So yes, if you travel overseas or to the U.S., you have a somewhat stronger Canadian dollar and that's good news because that helps maintain their standards of living.

Absolutely. And with all this, I mean we can create our own jobs and our own companies, but to increase our productivity, we also need to have foreign dollars coming to Canada, and I don't think that's a good number yet, right?

No, and you're right, that's why I want to be prudent for 2026 to sustain the job growth that we've been speaking to into next year. I need to bring investment back to Canada. So, we had two good positive quarters, but then we're back into negative territory. And notice Nancy, you know, we haven't been able to attract investment in this country for the past decade. So, hopefully what the federal government has done with the agreement with Alberta, there's a perception now that the energy sector is no longer stranded. So, you can come to Canada, invest, build factories, and have access to energy. If you want to do data centres, you can use natural gas to supply your data centres. So, that is a possibility that you bring foreign direct investment. So, the policies that have been deployed are structuring, but I need to confirm them. You're absolutely right to maintain a strong bid on my labour markets in 2026. Can't do it without business investment. You're absolutely right. We need to see that in 2026.

Absolutely. And what about our neighbors from the South? How are they feeling?

I don't know if they're disappointed because of what's happening to Canada, but their consumer confidence in the doldrums. Maybe there's some jealousy here.

That's surprising.

Yeah. So, it reflects frustration because whether or not the politicians will admit to it or not, if you impose a tariff structure of roughly 15% on your imports, which is what the U.S. is doing right now, it's showing up on inflation. And the U.S. household sector doesn't have access to the generosity of the social safety net that we have in Canada, so every bit of inflation bites even more, right? So, yes, quite the frustration. Lowest consumer confidence since COVID. So, I'm sure the U.S. president is looking at this saying "Well, you know that's not sustainable. Maybe I need to reframe my tariff structure in 2026, it could give me some little bit of appeasement on the CPI.".

And there isn't a lot of time to be able to do that because midterm is November.

That's why you might say that in midterm election year, the White House will do everything in its power to bring consumer confidence back up. And I don't think it's with higher tariffs, it's with lower inflation and lower interest rates.

Okay, so what about mortgages in the States? Well, I'm getting a little lower interest rates with the Fed again tomorrow, Nancy. Will be below 4%, but the problem is the frustration comes from the fact that the 30-year bond yield is not coming down. So, if the government bond yield doesn't come down, then the 30-year mortgage rate's not coming down. So, unlike a homeowner in Canada, in the U.S. they're not feeling the impact of monetary easing because long term rates remain very sticky on the upside.

So they have inflation and they have their mortgages payments not going down, so that's a frustration.

That explains the lack or the low level, the low reading on consumer confidence.

Absolutely. And what about government spending? What's happening in Canada, U.S.?

It's a global phenomenon, so you have to be careful what you wish for in 2026. So we've had good growth this year, but it's been supported by massive government stimulus across the planet. So, unless I deploy productivity gains in 2026, at some point you'll have to pay the piper on that one. So, for financial markets, we've had low volatility because stronger than expected economic growth, but does that come back to bite us in 2026 is the big question. So, unless I deploy productivity gains in the next few quarters, you might want to reassess the valuations on your global financial markets. So, 2025 was a spectacular year on the back of government spending. 2026 I need to deliver on productivity gains to justify these high valuations.

Productivity meaning AI, agentic AI, review of processes, investment in plants so that they can do. 

You're so right.

So much more.

You're so right. So everybody, we're seeing the investment, now does it translate into productivity. You and I will have a lot of conversations next year on that topic.

Definitely. So Stéfane, looking forward to hearing you again in 2026 to see what it will bring to us. I want to thank you for taking the time to listen to this little time with Stéfane and I want to wish you a happy season. Take the time to rest. It's two weeks where you can spend time with family and friends. So, looking forward to seeing you again in January. Thank you, Stéfane.

Thank you.

Hello everyone, welcome to Economic Impact. Today we are November 12, 2025, and as usual, I am with our Chief Economist, Stéfane Marion. Stéfane, once again we need to talk about, you know, Canada versus U.S., but rate cuts now.

There are so many things we want to speak to you Denis today, but let's start with the rate cuts because that's your specialty as a former head of fixed income. So yes, monetary easing cycle continued in Canada in October. 9th. It was the 9th easing rate cut since the beginning of the cycle that started in the summer of 2024. You know, we spoke last month, could there be more? The Bank of Canada was cautious on this one, Denis. It says, "I'm giving you one, but I think rates are neutral and I think I might be done for this easing cycle". So there's a considerable gap that remains with the U.S., you know, to reflect some of the challenges that we face on this side of the border. But it seems like the Bank of Canada is comfortable now saying, "Well, maybe monetary policy is where it should be".

Do you think it's unusual thinking that the rates will not go lower, considering what we see in the economy right now?

I would have thought so, like you, but the surprise in the Canadian economy over the past month, the past two months, is the uncanny resilience. So, the service sector in Canada, which is the biggest chunk of the Canadian economy, is indicating growth for the first time in nine months, right. And the manufacturing sector is still showing contraction, but nowhere near as bad as what we saw, so it seems like the Canadian economy is stabilizing with growth. It's not a boom Denis, but it's better growth than we had forecasted. So, you could justify the Bank of Canada's message based on the recent evidence that we're getting from economic reports.

And this is also what we get from the unemployment number, which was a big surprise.

All these surveys are meaningless if you can't confirm it with real data. And the real data shows that we've had some job creation to the extent that, good enough, to the extent that the unemployment rate actually edged below 7% for the first time in a few months. And more importantly, the wage inflation is growing at roughly 4%, which is above inflation. So that means that there is purchasing power at the consumer level that could help stabilize the Canadian economy, despite the fact that the export sector remains challenged.

It's quite interesting seeing that because this is not the perception we have when we're listening to the news. It's very negative compared to the results here.

You're right. And if you look at the, you know, there's been announcement that Ottawa's thinking about reducing quite significantly the size of the civil service in Ottawa. But having said this, what's happening in the private sector in Canada shows again, this resilience. So, notice in the U.S., the trend on private sector employment, this is a private survey Denis because, as you know, the government is still shut down-reopening, but it's going to take time to get the official data. But the private sector suggests this downtrend in U.S. employment growth. Canada is more volatile. So, I can't say that we have broken the trend with the U.S., but clearly in the last month we did. So again, that just speaks to some resilience in the private sector because the earnings season was better than expected on the S&P/TSX, so that would be reflected on employment. So, private sector holding up relatively well at this point in time. Again, suggesting that the BoC, the Bank of Canada, might have been justified to say, "Well, maybe we've done enough".

Now we have the reason. Ok. And now we have to talk about the budget in Canada because we spoke about it the last time. Now it's done.

Yeah, so we spoke last month. Ok, so one of the reasons the Bank Canada says, "Well, I need to pause now" is because, you know, we are getting fiscal stimulus in Canada. Maybe the budget was not as transformational as we thought it would be last month where we were arguing for $100 billion deficit, 3% of GDP. It came in that $80 billion. So, Denis, close enough to say, is it a structuring budget? I think it is because if you look at the composition of the spending for the years ahead, look at these blue bars, this is investment. This is not just spending that just goes to consumers and then that disappears in the economy through some import leakages. Absolutely not. This is a commitment to invest in the Canadian economy and to start to reindustrialize the country. So, notice that on the operating balance, you know, Ottawa says "Well, we'll be in surplus in three years from now, but we are committing roughly $280 billion to investment in the Canadian economy". So, Denis, that is structuring.

And this is how you build confidence in an economy when you see that amount of investment, which are not expenses, which down the road will produce revenue.

Yes, so, so you're going to run a 2.5% deficit as a share of GDP this year. But the commitment to skew it towards investment means that investors are unlikely to say, "Well, we don't believe in your story". They're going to say, "Ok, finally". And it's not just the spending Denis, it's also the commitment to reduce the substantial amount of regulation in this country. And also, importantly to say, maybe assets will be available for these pension funds to buy into Canada. So, in terms of, you know, positioning this budget, I would say it is structuring. So, we spoke about that last month and that was important and I think that they went in the right direction. Now there's a few things that need to be settled among which, you know, trade negotiations with the U.S. need to resume because that stopped since last time we saw each other. So. But again, it's certainly a big step in the right direction.

And that new picture to see deficit probably translates also positive on the stocks in the equity market because, we're not at a new high, but we're doing quite well.

Well, the performance this year has been stellar. I mean, more than 20%. Last time we saw that was 1993. By the way, that's the last time the Blue Jays won the World Series.

Well, we were close this year.

You were close.

Very close.

But we did more than 25% in 1993. So, we didn't win this year, but maybe, you know, more than 20% is great. So, aside from the Blue Jays, there's the fact that again, this budget is credible. And if you cut regulations for corporation, that means that you will help profitability down the road and that's more sustainable for the Canadian economy. We need to bring investment back to Canada. It's making Canada investable again. And I think on that side, the budget was important for investors. So, a lot of good news already priced in Denis. I can't promise you a repeat performance next year, but this proves that, you know, the budget was relatively well received. Now it's a matter of execution.

Yeah, exactly. And we see also that the Canadian dollar are fine, kind of. We saw the bottom, but now I think it's above $0.70. It's natural that the Canadian dollar is there.

No, you're right. And since the start of the year, we've seen, you know, Canadian dollar depreciation. Our forecast is, well, we might go to 1.42. You can see we went to 141.5, which is close enough to 142. I think you'll agree with me. Now, have we found the cruising altitude? A key condition to finding the cruising altitude for the Looney was this budget. So, the budget is credible. Now, what we're missing is, the budget was necessary, but not sufficient. Now we need to execute on bringing the regulation but also restarting these trade discussions with the Americans to provide, to have the full impact of the budget. So again, not out of the woods, but I think we're starting to find a cruising altitude. So, there might be more side for Canadian dollar appreciation in the quarters ahead.

Well, thank you Stéfane and thank you all of you. Today is my last presence on the stage. I would like to thank all the people, the investors who are listening to us and the positive comment that we get and we had. Very, very helpful to make that, you know, capsule better and better every day hopefully. I would like to thank also all the people here who make that thing happen. Spectacular team, all the technicians and the people around these stages are fantastic. And Stéphane, thank you very much for let me do that for you for the last past two years or so. It was a lot of fun, a lot of pleasure and long life to Economic Impact.

Denis if I may, I just have to thank you for the 35 years you spent at the Bank. And I would just want to say it was a privilege to work with you.

Thank you Stéfane.

Thank you very much.

Goodbye.