Arun Kumar, CPA

Canada entered 2026 with ~1% GDP growth expected, inflation near target, slower labor gains, and reduced immigration tempering momentum in a stabilizing environment.
Canadian long corporate bonds carried concentration risk: utilities and energy made up 57% of the long corporate index, while top 20 issuers held 64%.
The US long corporate market was more diversified. Its top 20 issuers represented 25% of the comparable index, spread across more sectors.
A CAD-hedged allocation to US long investment-grade corporate bonds could broaden issuer, sector, and geographic exposure without weakening liability alignment.
For liability-aware investors, multi-asset credit worked best as a return-seeking fixed income sleeve beside the liability-hedging portfolio, not as a Canadian bond substitute.
Multi-sector credit could add diversification through IG, HY, securitized debt, and EM credit, helping address Canada’s lower yields and structural concentration.
Public multi-sector credit also paire

Canada Fixed Income Needs Diversification

Canada's prime minister announced a temporary federal fuel excise tax suspension after fuel prices jumped sharply during Middle East oil-market instability tied to war with Iran.
The suspension was set to run from Monday through Labor Day, Sept. 7, before reinstatement Sept. 8, delivering ~$1.7B in total tax relief.
The federal tax covered regular gasoline, diesel, and aviation fuels. Officials said removing it would ease short-term pressure while supporting affordability and fiscal management.
Officials argued the tax pause would cut operating costs for truckers and businesses tied to food, agriculture, housing, construction, and delivery across Canada.
After attacks on Iran on February 28 triggered war in the Middle East, gasoline prices in Canada and globally surged, according to the government.