Good morning. In focus this week: Canada’s major oil producers get a lift ahead of earnings season; the country’s heavy equipment makers are building up – but surrounded by clouds; and a New Brunswicker learns the other meaning of “doré.”

Middle East: Iran’s military warned U.S. forces not to enter the Strait of Hormuz after President Donald Trump said the United States would start helping to free ships stranded there.

Banking: Canada’s banking regulator is planning a pilot project to streamline the process for joining the country’s banking system.

Trade: How the ‘Buy Canadian’ movement has been felt across the U.S.

1. Equipment check

Canadian producers of the equipment used to build, mine and farm are growing – but over uneven terrain.

Infrastructure and mining projects are supporting demand for heavy equipment, according to a new industry report, which found the sector’s sales activity rose 11 per cent and employment grew 3.3 per cent since 2022.

But weak housing, farm sector volatility and U.S. trade uncertainty are weighing on the sector’s outlook, which the Association of Equipment Manufacturers report describes as “selectively resilient but uneven.”

The triennial review, set to be unveiled later today by Canada’s equipment manufacturing sector, shows an industry caught between rising demand tied to infrastructure, mining and major projects, and pressure from weak housing, lower crop revenues and uncertainty around access to the U.S. market.

The report found the industry directly generated $29.3-billion in sales activity in 2025, up from $26.4-billion in 2022. Equipment makers directly employed about 71,000 people in 2025, up from 68,700 three years earlier.

Canada needs to strengthen its competitiveness at home through reduced interprovincial barriers, skilled-trades development and better ports, rail lines and border infrastructure, said Yannick Montagano, president of Kubota Canada Ltd., a manufacturer of farming equipment.

“For us, it can’t just be that one thing, trade policy alone.”

2. Policy

The new Parliamentary Budget Officer, Annette Ryan, is set to release her assessment of the federal Liberal government’s Spring Economic Update later today.

At a committee appearance last week, Ryan said the update will increase the federal debt burden, offered fiscal targets that lack clarity and launched a sovereign wealth fund that “raised more questions than it answered.”

Prime Minister Mark Carney did not go far enough with the $25-billion fund, John Rapley argues. Governments must now expand the mandate of Canada’s pension funds so that they invest more domestically. These funds should effectively become sovereign wealth funds as well, he says.

Carney was set to leave Armenia today after attending the European Political Community summit. His office said the focus of the trip is support for Ukraine and boosting trade, investment and defence ties with Europe.

3. Economy watch

Rates: When Tiff Macklem last appeared before the Senate banking committee in November – a regular part of the Bank’s accountability to Parliament – he said that in the face of a trade war and geopolitical shocks, monetary policy could only do so much.

• The Bank of Canada Governor returns to the Senate committee on Wednesday after two months of war in Iran have pushed oil prices above $100, and shifted expectations for rate cuts toward a longer hold.
• If higher energy prices lead to broadening inflation pressure, Macklem said after announcing a rate hold last week, “there may be a need for consecutive increases in the policy rate.”
• The word “consecutive” caught many observers as a hint that the bank is leaning toward raising rates, if anything, but most still expect rates to stay on hold for now.

Trade: Tomorrow‘s merchandise trade balance for March is expected to show a narrowing deficit, after February’s figures were skewed by swings in gold imports, which tend to reflect the plumbing of the global bullion market. (Canada is a significant producer, but it also refines doré and serves as a trade hub in that system – flows driven by inventory shifts and fund positioning, rather than underlying economic activity.)

Can I be honest with you? I had a foggy idea that “doré” was a French word for “walleye.” It wasn’t until five minutes ago that I learned it also refers to this:

• Where were we? Oh, yes! The economy. February GDP, released on Thursday, extended a run of modest growth. But so much of that momentum will be shaped by trade negotiations with the U.S.

4. On the job