Founder of Forthlane Partners explains how he approaches new US-Canadian tensions for HNW clients
Canadians might be forgiven for feeling a bit gloomy going into 2025. President Elect Donald Trump has threatened tariffs that could fundamentally weaken our economy. Our dollar has slumped against the USD and all our economic indicators look anaemic compared to the United States. Add to that, 2024 ended with a political crisis. The questions now are around when, not if, Prime Minister Justin Trudeau loses his grip on power, leaving Canada with something of a leadership vacuum at a sensitive time.
This is a time when Ken Grewal’s clients have a few concerns. Grewal is the founder of Forthlane Partners, an independent wealth management firm specializing in the high net worth segment. He explained that four key subsets of his clients are challenged by the current cross-border environment: those with importing or exporting businesses, those with passive assets in the US, snowbirds and other clients with US lifestyles, and clients sending their kids to US schools.
In working with each of those client subsets, Grewal breaks down the details of the US-Canada relationship beyond just what the headlines might scare them into thinking. He believes, too, that despite the challenges ahead there may be an impetus in the looming trade challenges that could spark a resurgence for the Canadian economy.
“I think the Canadian voter is demanding bold, structural changes. Which means whether you’re Trudeau or Poilievre, you have to actually effectuate those structural changes,” Grewal says. “In English, that means deregulation. The market loves deregulation and I think this has lit a fire under Canadian pride and our understanding of the economy. In a strange way I think this moment could potentially be unifying.”
One of the sources of Grewal’s optimism is in the various Canadian competitive advantages which he believes were neglected over the past 10 years. Many of those advantages can be found in natural resource sectors. Amid a global nuclear resurgence, Canadian uranium may prove a significant driver. Potash, natural gas, and oil resources are all economic standbys with huge potential amid surging global demand for resources.
These are also some of the resources and sectors unlikely to be subject to a potential Trump tariff. For all the bellicose rhetoric we hear from the President Elect, it’s notable that these resources are key cost inputs for many US consumer goods — not to mention the importance of Canadian oil in keeping US gasoline prices low. Given the role inflation played in Trump’s recent election win, it may be unlikely his incoming administration imposes tariffs on those key resource sectors. Counter-intuitive as it may appear, Grewal believes that investment in these resource sectors may result in deeper integration with the US.
That is not to say Grewal believes Canada should simply return to its role as the ‘hewers of wood and drawers of water’ for the United States. Investments in research, technology, and more specialized industries are key, but he argues that these investments should be tied to those natural resource sectors, letting them function as the engine for investments in innovation. Moreover, Grewal notes that Canada has lost market share in the energy tech, uranium tech, and other resource tech subsectors. He contrasts this experience with Scandinavia, where a similarly large forestry sector was buttressed with forestry tech investment. The heart of forestry tech is now in Scandinavia.
From a client service standpoint, Grewal has to take his economic outlooks and optimism and translate them to a client base who are now just worried about their operating businesses and their currency exposure. He notes that risk management is a core element of Forthlane’s business and that the team’s leadership pulls from experience in the pension industry. That experience has focused them on capital preservation, resulting in portfolios with greater global diversification and exposure to negatively-correlated assets.
Grewal argues that as other advisors look to serve their high net worth clients who are worried about rising trade tensions and a gloomy Canadian economy, there could be significant value in that globally diversified approach.
“I haven't seen a period in my career where we've seen such deglobalization and rising trade tension. When you have deglobalization, diversification matters more,” Grewal says. “So you may want to reexamine if you are global enough. And when we say global it’s not just buying US or European stocks. It’s owning real estate, infrastructure, private credit. It’s owning physical commodities, drug royalties, music royalties, airports. Advisors need to ask themselves if they are global enough.”
