The budget for the first two months of the fiscal year was released on Friday, showing a $2.6B expansion of the deficit driven by lower corporate taxes and GST revenue…

… offset partly by a $1.6B jump in import duties, as the trade war drags on. At $2.4B through the first two months, we’re running short of the $20B projection…

… which we’ll need alongside sizeable spending cuts if the country is to track to last year’s deficit or lower, while paying $9B more for defense.

Without it, expect more debt - following $50B of Canadian dollar issuance through April and May.

GO Residential REIT (GOU) completed its US$410M IPO on Friday, in the first corporate listing this year and the largest since Groupe Dynamite’s $300M raise in 2024. Since the pandemic, getting new companies to list has been a challenge…

… so while GOU’s U.S. focus drew criticism, if it opens the IPO market… net positive in my view. It’s not the first American REIT on our market either, with capital rotating out of BSR REIT (HOM-U) and Flagship Communities REIT (MHC-U) on Friday.

The reason behind the Canadian listing strategy becomes clear when looking at the publicly traded U.S. REITs - only the biggest companies get sell-side attention. An important, but misunderstood part of equity research is that it’s a two-sided model.

On one hand, it’s a resource to help investors - on the other, it’s a marketing tool for the corporate. GOU’s TSX listing is evidence that in the REIT space, Canada’s best brokers are preferred over America’s B-Team.

Last Astronomer coverage, but I need to take my victory lap. In a full circle moment, the company has featured Gwenyth Paltrow (Coldplay singer’s ex-wife) in a marketing campaign that plays off of that viral moment.

The initial f*ck up from management might have been real, but if there’s one thing America’s top venture capitalists are great at… it’s spinning a narrative.

More insider buying at Canadian National Railway…

Valeura Energy (VLE) jumped 25% after acquiring a 40% stake in ~20K acres in the Gulf of Thailand for ~$18.5M. The two blocks are near VLE’s existing oil fields and some of Thailand’s largest gas fields - and with 15 oil discoveries there already, they add some de-risked development runway for Valeura.

Hammond Power (HPS) gave 17% back after its Q2 results which beat on revenue but missed on profit, as higher materials costs (steel/aluminum) and a ramp-up at it’s new Mexican facilities squeezed margins.

The good news is demand remains robust, with management highlighting a big appetite for custom projects (higher margin) linked to data centers…

… but margin expansion could take time, as April’s price increase and a production ramp up in Mexico have to contend with inflationary pressures on input costs.

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