On Friday Algonquin announced its new CEO Rod West, former group president of Entergy’s utility business, would take the reigns in March. Markets liked the news, pushing shares up 3.5% to close out the week.

The question we’re asking ourselves is will he be the one to lead Algonquin back to its former glory, or will investors still have a hole in their pocket from the past few years?

To answer that, we have to look back at what happened - it’s fairly straightforward. AQN operated two distinct business units, a regulated utility segment and a renewable power generation segment.

The market loved, and then hated them for it. Here’s why:

In the regulated utility model, you fund yourself with roughly 50% debt and 50% equity - this is enforced by regulators to ensure the operator of the utility doesn’t go bankrupt and leave thousands without power.

The renewable generation model has much more leverage (60-80% of total cost), given that financing is done at the project level and long-term offtake contracts are signed before the first power is produced.

See the problem? As the renewable business grows, it adds more leverage than utility regulators are comfortable with, making growing the utility business more capital intensive. Growth in one business chokes out growth in the other.

Leverage is fine when you can tap equity markets to foot the bill, but when financing conditions dried up in 2022 and rates jumped, AQN got hit with a double whammy: higher interest costs and no access to the capital markets to pay for it.

Since then, AQN has made the hard, necessary changes to right-size the ship including:

The tone has shifted on how they allocate capital, focusing on long-term sustainability over near-term improvement of metrics.

And it’s not just talk.

As of Q3, AQN had roughly $200M of pending rate cases that should start to lift results in 2026, with the full impact by 2027.

The company is also shopping its hydro assets, which we think could fetch >$350M to put towards growth or balance sheet strength.

Despite the positive developments in recent months, AQN finds itself in the uphill battle of winning back investor trust, and its valuation reflects it.

That said, we did a deep dive on valuation and if the company can keep putting wins on the board, there could be significant upside from here.

If the above link won’t work, try this: https://www.bullpen.finance/content/27

The stage is set, and we’ve got more details on the opening acts of both the U.S. and Canada.

America punched first, with a 25% tariff on all Canadian (and Mexican) imports and a smaller, but still impactful 10% tariff on Canadian oil imports - unsurprising given that Canadian oil accounts for the majority of America’s imports.

Last night Canada punched back with 25% tariffs on $30B worth of U.S. goods, with an additional $125B of goods to get the same treatment after a 21-day comment period.

Below is an estimate from Trevor Tombe (Economics Professor at the University of Calgary) on the allocation of Canada’s tariffs on different sectors:

The CAD sold off hard last night in response, after already being under pressure for the last few months.

This isn’t good for anyone, but especially not for Canadians, who have become increasingly reliant on the U.S. in areas like defense, a key point of contention Trump looks to be focused on as this trade war develops.

We see Canada ramping up defense spend to satisfy U.S. demands and end this trade dispute, or reduce reliance on their military going forward if tariffs remain sticky. We wrote about the topic in more detail previously, linked below:

We think we could reuse this meme for a long time, given how long this trade war could last and how impactful it could be to markets at home.

To our readers in wealth management, we’ve heard from you that this is an extremely important topic for your conversations with clients.

To our retail investor readers, we know this is a source of great uncertainty for you.

To both, we know there’s not an easily available, reliable source of information on the topic - and trying to stitch together the story and guess the impact from a million different sources isn’t feasible. We’re doing something about that.

In the near future we’re going to publish our initial research on the topic of tariffs on the website - free for Morning Meeting subscribers like you. If you like what you see, we’re going to keep making it better and better.

The goal here is to make it the only research on the topic you need to understand what’s happened, what’s coming, and what’s the impact. Do me a favour and click the button below and tell me what questions you want us to address.

Canada’s official response to the U.S. Tariffs

Imperial Oil says it can offset tariffs at refineries

Bank of Canada report evaluating the potential impacts of US Tariffs

On a production basis, Brookfield Renewable reported a weak quarter, with generation at only 80% of its long-term average forecasts. Despite this, FFO hit street estimates of $0.46/unit, highlighting that this isn’t a regular IPP.

91% of its FFO came from “other income” (and 55% for the year), an opaque line item that is largely driven by the gain on sale of assets. While this may seem like a great model – where BEP can offset poor generation with asset recycling, it does raise some sustainability concerns. It also makes you wonder - should credit agencies be treating BEP like an IPP still?