In addition to the recent volatility in the market, tariffs have been another key concern for investors since Trump won the U.S. election. Specifically, Trump’s tariffs policy was expected to go into effect on March 4, 2025, of which Canada also retaliated with a 25% tariff on more than $100 billion of U.S. goods. Much of this is still influx, and the rates and goods can change at any time.

As Warren Buffet recently mentioned in an interview, “Tariffs are an act of war,” which serve as a tax on goods over time, therefore, raising prices for consumers. This is an economic weapon that could last for some time. More than ever, investors are looking for companies that are “bullet-proof” for this theme and could help investors navigate through the volatility of the market.

There are not many public companies that communicate with investors about the direct impact of tariffs on their business. That being said, we think owning high-quality names that focus on domestic markets or other international markets (other than the U.S.) could be a good hedge. The following is a list of Canadian stocks that we feel have a good degree of protection from the threat of US tariffs.

1. Financials

Canadian banks and insurance companies that have high exposure to the domestic market. These companies are not dependent on importing/exporting physical goods. Although sustained tariffs could lead to an economic slowdown and weaken consumer health over time, this scenario is unlikely to happen overnight.

Sun Life Financial (SLF, Market Cap: $45 billion): A well-established Canadian insurance company with a decent track record of profitability and dividend growth.

The Bank of Nova Scotia (BNS, Market Cap: $87 billion): An international bank with main exposure in Latin America and the domestic market.

Goeasy (GSY, Market Cap: $ 2.6 billion): a small-cap consumer lending business with superior growth and return on capital profile.

2. Gold

Precious metals like gold are global commodities. Most investors consider gold as an investment and store of value. These companies could operate their businesses in the domestic and international markets (aside from the U.S.) with global demand. Therefore, there is minimal exposure to trade wars.

Agnico Eagle Mines Limited (AEM, Market Cap: $70 billion): A global gold mining company with mines located in Canada, Australia, Finland, and Mexico.

Franco-Nevada Corporation (FMV, Market Cap: $40 billion): A capital-light gold royalty company with solid cash flow generation.

Wheaton Precious Metals Corp. (WPM, Market Cap: $45 billion): A precious metal miner that produces and sells gold, silver, palladium and cobalt deposits.

3. Utilities and energy

Utilities primarily serve consumers and businesses in the domestic market. The industry provides essential products and services that are recession-proof in nature. These companies’ facilities are mainly located in the local areas where they operate. Therefore, there is a low exposure to tariffs. 

In addition, though some energy companies that have a decent business volume from the U.S. could be affected, there are other companies that generate revenue and own assets in Canada and, as a result, could be less affected.

Suncor Energy Inc. (SU, Market Cap: $63 billion): an oil-refining company with the majority of operating revenue and assets located in Canada.

Hydro One Limited (H,  Market Cap: $28 billion): operates as an electricity transmission and distribution company focused in Ontario.

Capital Power Corporation (CPX, Market Cap: $6.9 billion): a developer and operator of renewable and thermal power generation facilities.

4. Technology

Technology, as an industry, is quite large. Some companies in different niches may be impacted to varying degrees. That said, we think software companies, especially ones that operate on a global scale, that have most of their revenue from international sources or a minor percentage of total sales from the U.S. are expected to be less affected or immune from this political trade war.

Topicus.com Inc. (TOI, Market Cap: $11.6 billion): a serial acquirer of vertical market software focused on the European market.

Vitalhub Corp. (VHI, Market Cap: $506 million): an acquisitive growth software company focused on healthcare with minor revenue exposure to the U.S.

Celestica Inc. (CLS, Market Cap: $15.6 billion): a supply chain solution provider with less than 10% of its revenue from the U.S. market.

Conclusion

The commonality among the names mentioned in each sector is that these companies, as a group, have none or limited revenue sources from the U.S. market. We only include companies that actually disclose their exposure in terms of a percentage that is less than 10% of the top line.

In addition, these companies are well-established entities, widely considered leaders in their industries, with decent track records of operational efficiency and shareholder value creation. These companies are well-positioned for this environment which could help investors not only get through tough times but also do well over the long term.

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Disclosure: The analyst(s) responsible for this report do not have a financial or other interest in the securities mentioned.