HEADLINES

Manufacturing Sector PMI Rises to 53.5 in July, Strongest in Four Years

Canadian manufacturers activity was the hottest in four years last month thanks to a lift in domestic activity that more than made up for faltering international demand, data showed.

The S&P Global Canada manufacturing purchasing managers index rose to 53.5 in July, the highest since June 2022 and driven by improved readings for output and new orders. The advance marks a fourth straight month above the 50 threshold between expansion and contraction after the index in June rose to 53.

Manufacturing companies in the country were encouraged to take on additional workers, raising staffing levels to bolster capacity and help support current workloads, Paul Smith, economics director at S&P Global Market said. Still, Smith said it was doubtful manufacturing growth will continue at the current pace.

"International demand remains weak, driven lower by tariffs and a highly uncertain geopolitical environment. These factors also continued to push up prices rapidly whilst adding to ongoing and widespread supply-side disruption," he said.

Goods-Trade Surplus Widens Slightly With Record Exports, Imports

Canada's trade surplus with the world hit a four-year high as exports rose for a fifth straight month to reach a fresh peak, buoyed by a surge in gold shipments that helped counter a pullback in oil prices and all-time high imports.

Canada recorded a merchandise-trade surplus of C$3.86 billion, Statistics Canada said. That was larger than the positive C$3 billion trade balance that economists had anticipated and came after May's surplus was revised downward to C$3.7 billion.

Exports of Canadian goods increased 0.4% to C$77.79 billion in the latest month, while imports nudged up 0.2% to C$73.63 billion, the national data agency said.

Trade Momentum Looks to Be Holding Up

MDA Space to Build 27 More Satellites for Expanded Telesat Network

MDA Space was awarded a $474 million contract to build additional satellites for Telesat's low Earth orbit network, boosting the company's manufacturing backlog as Canada accelerates its space-based defense capabilities in the Arctic.

The follow-on order stems from an agreement between satellite operator Telesat and Canada's Defence Investment Agency valued at up to C$2.7 billion to deliver secure military satellite communications to the Canadian Armed Forces under the Enhanced Satellite Communications Project-Polar program.

To support the defense initiative, Telesat is expanding its Telesat Lightspeed constellation by 69 satellites, 27 of which fall under MDA Space's contract expansion, and bringing the low Earth orbit network to 225 satellites. The satellites will be built by MDA at its facility in Montreal and eventually launched on SpaceX Falcon 9 rockets.

Telesat Secures Record C$2.3 Billion Military Satcom Contract

Hut 8 Logs Loss as Non cash Accounting Hit Offsets Revenue Gain

Hut 8 swung to a loss in the second quarter due to a non-cash accounting drag, offsetting a sharp rise in revenue driven by its expanding compute business.

The energy infrastructure platform and digital compute company on Tuesday posted net loss of $150.2 million, or $1.27 a share, compared with a profit of $137.3 million, or $1.18 a share, in the comparable quarter a year ago.

The loss was largely due primarily non cash accounting hit of $94.6 million on its digital assets in the quarter, compared with gains in the prior-year period worth around $217.6 million.

According to FactSet, analysts were expecting a loss, but a more modest one to 55 cents a share.

5N Plus Shares Slide on Higher Costs, Tighter Margins

5N Plus shares fell as higher input costs and moderating orders overshadowed strong second-quarter sales growth.

Shares fell 8.6% to C$29.79.

The Montreal-based semiconductors and performance materials late Monday said adjusted gross margin as a percentage of sales fell to 30.3% in the second quarter, compared with 34.6% in the prior-year quarter.

Chief Executive Richard Perron said quarter's performance reflected increased cost pressures as well as temporary operational inefficiencies as part of the company's capacity expansion initiatives.

Canadian Pacific Kansas City Breaks 2020 Grain Record on Strong Crop Year

Canadian Pacific Kansas City set an all-time company record for transporting Canadian grain thanks to a bumper 2025-2026 crop year.

The Canadian railroad said it moved 30.66 million metric tons of grain and grain products in the crop year, beating its last record by 72,500 tons, which was set in the 2020-2021 crop year.

"Our dedication to service excellence, paired with solid execution by our customers and terminal operators, led to a crop year that saw more Canadian grain and grain products move on our network than ever before," said John Brooks, the company's chief marketing officer.

Altus Sells Development-Advisory Business to Newmark

Altus Group agreed to sell its development-advisory business to an affiliate of Newmark Group as it looks to refocus on its core valuation, data-analytics and software business.

The Canadian commercial real estate intelligence company didn't disclose any financial details of the sale on Tuesday, but Chief Executive Mike Gordon said the sale of the segment completes the company's planned divestitures for 2026.

The sale includes Altus's development-advisory operations in North America and Asia Pacific.

TALKING POINT

Private Equity and VC Deals Were Fewer, but Bigger, in First Half of 2026

By Olivia Grandy of the Globe and Mail

Private equity and venture capital firms did fewer but bigger deals in Canada in the first half of 2026, according to the group representing the country's private capital industry.

The total value of investments made by the private equity sector fell compared to a booming 2025, but held steady compared to prior years, while the total dollars deployed in the venture capital space rose, said two reports from the Canadian Venture Capital (CVCA) and Private Equity Association.

Private equity firms focus on acquiring established companies that need restructuring or growth capital, while venture capital investors target higher risk, early-stage startups with the potential to grow.

CVCA chief executive officer Benjamin Bergen said the rise of the megadeal is not a trend that's unique to Canada and is also happening globally.

In the first half of 2026, private equity firms invested C$12.7 billion across 252 deals in Canada, a 59% drop from the C$31 billion invested across 332 deals in the first half of 2025.

However, Mr. Bergen pointed out that private equity activity appears steadier when compared to 2023 and 2024 dollar totals. The first half of 2023 saw C$5.6 billion invested, and the first half of 2024 saw C$8.6 billion.

The market consolidated into fewer, larger financings, CVCA's report noted.

During the first half of this year, the privatization of four companies Dentalcorp Holdings Ltd., Information Services Corp., ECN Capital and Blackline Safety Corp. - made up 57% of total capital deployed. That continues a trend of publicly traded companies on the Toronto Stock Exchange being bought by private equity investors and taken private.

"A few very large take-privates shaped the half, with global and domestic capital both deploying into Canadian companies at scale," Mr. Bergen said in a press release.

The initial public offering of Canada's biggest drug manufacturer, Apotex Health Corp., in June was the most notable sale by a private equity firm. The company, which was backed by New York-based SK Capital Partners, launched the largest Canadian IPO in five years.

Canadian venture capital firms invested C$2.7 billion during the first half of the year, up by 17% from the same period last year. However, the total number of deals fell by roughly 9 per cent to a total of 250.

The CVCA said it was the first time since 2021 that venture capital investments climbed in the first half of the year compared to same period in the prior year.

"There was a tremendous amount of capital that flowed in 2021, and it kind of distorted venture capital and, to some extent, [private equity]," Mr. Bergen said in an interview.

"What our data is trying to show, is that we've actually returned to sort of normal levels that are outside of that 2021 year."

The largest early-stage transaction in the first half of this year was the C$139 million financing round raised by Ontario-based Dominion Dynamics. The deal also marked the largest Series A early-stage venture capital financing ever by a Canadian defence startup.

Meanwhile, foreign investors had a major presence in later-stage VC deals in the first six months of the year. Foreign investors took part in 56% of the funding deals, up from 30% a year earlier, as Canada has been increasingly trying to attract capital from outside its borders.

"Given all of the geopolitical and technology changes that are occurring, we are seeing Canada hold ground, and there is a huge opportunity for Canada to try to seize more wealth, prosperity and sovereignty that exists globally," Mr. Bergen said.

Expected Major Events for Wednesday

00:30/JPN: Jul Japan Services PMI

06:00/JPN: Jun Revised Machine Tool Orders

06:00/RUS: Jul Russian Services PMI

06:45/FRA: Jun Industrial production index

07:45/ITA: Jul Italy Services PMI

07:50/FRA: Jul France Services PMI

07:55/GER: Jul Germany Services PMI

08:00/UK: Jul UK monthly car registrations figures

08:30/UK: Jul S&P Global UK Services PMI

08:30/UK: Jul UK Official Reserves

08:30/UK: Jul Narrow money (Notes & Coin) and reserve balances

11:00/US: 07/31 MBA Weekly Mortgage Applications Survey

12:15/US: Jul ADP National Employment Report

13:45/US: Jul US Services PMI