The TSX is reacting to the budget announcements. After a constant back and forth on tariffs with its single largest trading partner — the United States — the Canadian government has set the tone for a structural shift in trade. Calling it the nation-building budget, the government will invest in building infrastructure, railways, and defence.
New money coming into these sectors has created a lucrative investment opportunity for long-term investments in the Tax-Free Savings Account (TFSA).
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Best stocks to invest $1,000 in a TFSA right now
Canadian National Railway stock
The budget considerations include investment in rail lines in Alberta and rail infrastructure on the West Coast. One company that would stand to benefit from this is Canadian National Railway (TSX:CNR).
Canadian National Railway has been struggling with revenue growth since last year as trade volumes declined. It was hard hit by the tariff war as it transports chemicals, petroleum, grain, forest products, and automotive goods to the United States.
The company embraced the trade challenges and revised down its adjusted earnings per share (EPS) guidance to mid- to high single digits. It has been cutting costs to improve efficiency, and the outcome was visible in the third-quarter earnings. Its revenue rose 1% year over year, while net income rose 5%.
Canadian National Railway has lowered its 2026 capital expenditure to $2.8 billion from $3.35 billion in 2025, as it completed capacity expansion in Western Canada and locomotive upgrades.
Canada’s move to diversify export partners might require rail infrastructure to the ports, creating a long-term growth opportunity for Canadian National Railway. However, its capital-intensive nature makes the stock a better dividend investment that will benefit from the structural change in global trade. It has a 2.6% dividend yield and the company can continue growing its dividend by low to mid-single digits.
Descartes Systems stock
A growth stock that will benefit from the structural change in global trade is Descartes Systems (TSX:DSG). Its supply chain management and logistics offerings help companies transmit goods and services efficiently. From route mapping to customs and compliance, companies can use the entire suite of services or use a single offering. Whether it is just a single consignment or a regular trade, companies can use Descartes.
Unlike other software-as-a-service (SaaS) models that push annual subscriptions and have lower flexibility in choosing, the Descartes model is more flexible. Hence, the company’s stock price is affected by trading volumes. The stock is at its 52-week low as the tariff war reaches its peak.
A shift in global trade will require robust execution, driving demand for customs and compliance, transport and inventory management, route planning, and other offerings. Next year could see a recovery in its share price.
Investor takeaway
Both stocks are trading near their 52-week lows as trade uncertainty affects their near-term outlook. However, they have strong fundamentals to withstand the slowdown and tap the high volumes during trade recovery.
A $1,000 investment in the two stocks now can help you lock your position in the trade volume recovery rally in the medium term. A recovery rally has more upside potential than normal growth.
