TORONTO -- Corporate Canada is sizing up the Liberal majority and what it could mean for their bottom lines, with the construction industry particularly poised to benefit from Justin Trudeau's promises to boost infrastructure spending.
The Liberal leader has vowed to inject billions of dollars into repairing roads, building bridges and improving waste water treatment plants across the country, among other projects -- all commitments that could cement big profits for the bricks-and-mortar industry.
"There's no question, the Liberal commitment to infrastructure in their election platform was sizable," said Michael Atkinson, president of the Canadian Construction Association. "We're very excited about that."
The government's majority status will be helpful in implementing infrastructure projects, he added.
"It's much easier to deal with long-term infrastructure programs when there's some certainty about the programs themselves."
Economists said Trudeau's plan, which would see the government borrow money by selling bonds, will push much needed fiscal stimulus into Canada's lagging economy, at least in the near term.
"The net fiscal boost -- and we can all debate the appropriateness of running deficits -- will give at least a short-term lift to economic growth, with most of the impact landing in 2016," BMO economist Douglas Porter said Tuesday in a note to clients.
"At best, the stimulus would lift GDP growth by a bit more than 0.5 per cent next year," he added, noting that even if the effects prove temporary, they would keep the potential for another rate cut from the Bank of Canada at bay and could even lead to a rate hike.
One company that could benefit is SNC-Lavalin, which has landed multimillion-dollar contracts with various levels of government in the past.
But the Montreal-based engineering giant, which declined to comment Tuesday, could be banned from bidding on federal contracts for 10 years it if is convicted of fraud for work in Libya. The company's case is still before the courts. It has said it will plead not guilty.
RBC analyst Sara O'Brien listed Aecon Group Inc. (TSX:ARE), Stantec Inc. (TSX:STN), WSP Global Inc. (TSX:WSP) and Canam Group Inc. (TSX:CAM) as other companies in the engineering and construction sector that are likely to reap rewards from increased infrastructure spending.
Medical marijuana stocks also surged on news of Trudeau's win, with Canopy Growth Corp. (TSXV:CGC) up more than 10 per cent in morning trading to $2.40.
Shares of Canopy, a combined company formed by Tweed Marijuana Inc. and Bedrocan Cannabis Corp., have soared more than 40 per cent over the past five days, while Mettrum Health Corp. (TSXV:MT) saw its shares shoot up eight per cent, or 15 cents, Tuesday morning to $1.99.
Licensed producers are preparing for the likelihood that the new government will permit recreational access to the drug as the Liberals have promised -- a move that would fuel rapid growth in Canada's burgeoning cannabis industry.
"One of the keys will be learning from the experience we've had over the last 18 months in providing medicine to patients ... and looking at what can be translated into adult recreational use," said Greg Engel, the CEO of B.C.-based Tilray.
Engel said the potential growth in the cannabis industry if a recreational program were implemented is difficult to quantify, adding that the medical program alone is expected to see significant expansion.
"I can't predict what the adult recreational market would look like," he said.
