The world needs more resources and Canada has them. Investors are taking notice

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Investors are taking noticeMartin Pelletier: AI and geopolitical risk could transform Canada’s resource-heavy stock market from laggard to strategic assetLast updated 17 minutes ago The LNG tanker GasLog Glasgow prepares to depart LNG Canada's shipping terminal in Kitimat, B.C. Photo by Handout/LNG CanadaFor years, investors have had it relatively easy. Globalization kept costs low, central banks suppressed interest rates and capital flowed freely across borders. The biggest winners were asset-light businesses capable of generating enormous growth without consuming significant amounts of labour, energy, commodities or infrastructure.THIS CONTENT IS RESERVED FOR SUBSCRIBERS ONLYSubscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman, and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.SUBSCRIBE TO UNLOCK MORE ARTICLESSubscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.REGISTER / SIGN IN TO UNLOCK MORE ARTICLESCreate an account or sign in to continue with your reading experience.Access articles from across Canada with one account.Share your thoughts and join the conversation in the comments.Enjoy additional articles per month.Get email updates from your favourite authors.THIS ARTICLE IS FREE TO READ REGISTER TO UNLOCK.Create an account or sign in to continue with your reading experience.Access articles from across Canada with one accountShare your thoughts and join the conversation in the commentsEnjoy additional articles per monthGet email updates from your favourite authorsSign In or Create an AccountThat world is now being challenged by two powerful forces: artificial intelligence and U.S. President Donald Trump.Investors continue to view AI primarily as a software story, but it is rapidly becoming a resource story. Building the infrastructure required to support artificial intelligence demands staggering amounts of capital, electricity, copper, steel, cement, natural gas, and rare earths and other critical minerals. Data centres are becoming some of the largest consumers of power on the planet, forcing governments and utilities to rethink generation and transmission systems built for a very different world. At the same time, the vast sums needed to finance this buildout are competing directly with governments for capital, placing upward pressure on long-term bond yields.Canada's best source for investing news, analysis and insight.By signing up you consent to receive the above newsletter from Postmedia Network Inc.A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of Investor will soon be in your inbox.We encountered an issue signing you up. Please try againSince returning to office, Trump has accelerated a trend already underway: a shift from globalization toward economic nationalism. Trade disputes have intensified, supply chains are being redrawn and governments are increasingly focused on domestic production, energy security, critical mineral access, manufacturing capacity and strategic industries.Layer on persistent deficits, aging demographics, labour shortages, rising defence spending and growing geopolitical tensions, and the result is a world facing structural inflationary pressures that monetary policy alone cannot solve.While investors continue debating whether inflation will settle at two per cent, or whether central banks will hike or cut rates by another 25 basis points, many are missing the bigger picture. What happens if we are entering a world defined by resource scarcity? What happens if the primary constraint on economic growth is no longer the cost of money but the availability of energy, electricity, commodities, skilled labour and infrastructure?Central banks can create liquidity. They cannot create copper mines, natural gas export terminals, power grids or pipelines, or even refill their strategic oil reserves. That is precisely why Canada may become one of the most attractive investment destinations of the coming decade.For years, Canada’s resource-heavy stock market was viewed as a weakness. Investors routinely criticized the S&P/TSX Composite for lacking the technology giants that propelled the S&P 500 higher. But what if the market got it backwards? What if Canada’s concentration in hard assets becomes one of its greatest advantages?Unlike the S&P 500, which has become increasingly concentrated in a handful of technology companies, the TSX remains heavily weighted toward financial institutions, energy producers, pipelines, utilities, railways, industrial companies and materials producers; in other words, businesses tied directly to the physical economy.This advertisement has not loaded yet.This advertisement has not loaded yet, but your article continues below.That matters because the world increasingly faces shortages while Canada sits atop an abundance of nearly everything required to solve them. We possess vast oil and natural gas reserves, abundant critical minerals, world-class agricultural land, enormous hydroelectric capacity and some of the strongest governance standards anywhere in the world.For much of the past decade, however, Canada under the leadership of Justin Trudeau acted as though those advantages could be taken for granted. Investment capital left the country. Excessive regulation was implemented, resulting in major infrastructure projects being delayed, cancelled or abandoned altogether. Meanwhile, the United States, once our biggest customer, has become our biggest competitor as they did the opposite, aggressively pursuing energy independence, expanding LNG exports, increasing oil production to record levels, and moving rapidly to secure critical mineral supply chains.Ironically, Trump’s increasingly aggressive trade posture may ultimately be remembered as the catalyst that forced Canada to finally wake up.Recent policy changes under Mark Carney’s leadership suggest policymakers are finally recognizing the huge opportunity sitting right in front of them. Ottawa has introduced significant tax incentives for projects exceeding $1 billion, making Canada among the most competitive jurisdictions in the G7 for large-scale investment. The federal government is also marketing tens of billions of dollars worth of projects to global investors, spanning LNG, mining, data centres, advanced manufacturing, power generation and transportation infrastructure.At the same time, Canada is working to diversify its trade relationships beyond North America, particularly with Europe. The European Union economy is roughly eight times larger than Canada’s and is actively searching for secure sources of energy, critical minerals and industrial inputs. Canada possesses all three.The same story is unfolding globally. Countries seeking strategic allies are also seeking dependable suppliers of energy, food, critical minerals and infrastructure. And Canada is in the early stages of repositioning itself to be able to deliver.Investors may already be starting to notice. Since Donald Trump returned to office in 2025, the S&P/TSX Composite has gained roughly 23 per cent compared with 13 per cent for the S&P 500 in U.S. dollar terms, a remarkable reversal from years of Canadian underperformance.I suspect this is only the beginning. For much of the past decade, Canada ignored many of its greatest advantages. Today, rising geopolitical tensions, economic nationalism and the AI infrastructure boom are forcing the world and us to rediscover them.During a gold rush, the real winners are often those supplying the shovels. Sometimes it takes external pressure to reveal internal opportunity. Canada may finally be waking up and investors would be wise not to sleep through it.Martin Pelletier, CFA, is the author of Investing Through the Storm and a senior portfolio manager at TriVest Wealth, a team that is part of Wellington-Altus Private Counsel Inc. TriVest provides discretionary risk-managed portfolios, investment audit/oversight and advanced tax, estate and wealth planning. The opinions expressed are not necessarily those of Wellington-Altus._____________________________________________________________If you like this story, sign up for the FP Investor Newsletter.Notice for the Postmedia NetworkThis website uses cookies to personalize your content (including ads), and allows us to analyze our traffic. Read more about cookies here. By continuing to use our site, you agree to our Terms of Use and Privacy Policy.