Canadian transportation stocks have been laggards in 2025, and much of the pain can be traced back to Trump’s tariff rhetoric. These companies have been hit disproportionately hard as a result of his trade war.
Tariffs, in practice, slow the flow of goods across borders. That directly impacts transportation companies—especially railways, trucking firms, and logistics providers—by cutting into the volume they move. The uncertainty around trade policy also makes it harder for these businesses to forecast earnings or give confident guidance to investors. None of that inspires market confidence.
But short-term noise doesn’t change how these companies fundamentally operate. Trump won’t be in office forever, but some of these transportation companies will be. If you believe in buying when others are fearful, I’ve got three picks to spread a $7,000 Tax-Free Savings Account contribution across.
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$6,000 between two Class 1 railways
I’d allocate the bulk of a $7,000 TFSA contribution by splitting $6,000 evenly between Canadian National Railway (TSX:CNR) and Canadian Pacific Kansas City (TSX:CP)—$3,000 each.
You might already own one or both. But for newcomers, these are two of the most stable blue-chip stocks in the Canadian market. They have long histories of dividend growth, operate with efficient double-digit margins, and are known for well-timed share buybacks and smart acquisitions.
Right now, both stocks are reasonably priced, which is rare for high-quality companies that usually trade at a premium. CNR has a forward price-to-earnings ratio of 17.18, and CP sits at 20.62. That translates to earnings yields of approximately 5.82% for CNR and 4.85% for CP.
Compare that to the 10-year Government of Canada bond yield at 3.13%, and it’s finally a no-brainer—you’re getting enough return per dollar of earnings to justify the risk. These stocks used to be expensive. Now, they look fairly priced, which is hard to find.
$1,000 to a trucking company
The remaining $1,000 of our $7,000 TFSA contribution goes to TFI International (TSX:TFII) as a higher-risk, higher-upside growth bet.
Not all goods can be shipped by rail. Some shipments are too time-sensitive, too short-distance, or too small to fill an entire railcar. That’s where less-than-truckload (LTL) shipping comes in—moving freight that doesn’t require a full truck, often consolidated with other shipments.
TFI operates across that space, along with truckload, logistics, and specialized transportation services. Its network includes 14,243 trucks, 45,453 trailers, and 7,592 independent contractors, making it one of the largest players in North America.
Margins aren’t as strong as with railways because trucking is more competitive and fuel-intensive, and customers can more easily switch carriers. Still, TFII’s management has made the most of it, delivering a 16.53% return on equity, which shows it’s generating strong profits relative to shareholder capital.
The stock is also cheaper than the railways, trading at a forward price-to-earnings ratio of 13.23, which equates to an earnings yield of about 7.56%. That’s well above the 10-year Government of Canada bond yield of 3.13%, giving you solid compensation for the added risk.
