3 Canadian Stocks That Could Thrive if the Loonie Weakens

If the loonie slides again, these three Canadian names can get a built-in tailwind because so much of their revenue is earned in U.S. dollars.

Amy Legate-Wolfe

Author Bio Amy became interested in investing in 2018 after having her first daughter. After receiving a masters degree in journalism from Western University, she became frustrated that the finance industry remained a confusing place for Canadians like her: new parents, millennials, and other young people who needed to understand their finances. Now, Amy focuses on tech companies and renewable energy for growth opportunities, coupling that with long-term investing strategies and equities. She also provides investors with a daily newsletter, Canada Stock Digest, for daily market updates. Her work can also be found at Canada's National Observer, where she writes on the business side of climate action. Before joining Motley Fool Canada, Amy wrote for major news organizations including HuffPost, CTVNews.ca, and CBC. When she’s not researching investing strategies, Amy’s time is pretty much monopolized by her two wild daughters, but in what little spare time she has she loves to do yoga, go on walks with her dog, and travel with her husband. Social Media Follow Amy on LinkedIn and Canada Stock Digest. Favorite Investment Quote “October: This is one of the particularly dangerous months to speculate in stocks. The others are July, January, September, April, November, May, March, June, December, August and February.” – Mark Twain

Published March 2, 4:50 pm EST

| More on: BBD.BCAEMG

Key Points

CAE, Magna, and Bombardier all benefit when a weaker Canadian dollar boosts the CAD value of their global sales.
CAE offers the most “contracted” setup with massive backlog, but the stock already looks expensive.
Magna and Bombardier trade at more reasonable valuations and pair currency help with solid cash-flow outlooks.

The loonie has spent the past year bouncing between rate expectations, oil prices, and trade nerves. Lately, it has sat around the low US$0.70 zone, and tends to sag when crude dips or headlines heat up ahead of key trade reviews. If it weakens again, some Canadian firms can look better fast. U.S.-dollar revenue converts into more Canadian dollars, and global competitiveness improves. With that in mind, what Canadian stocks can help during a loonie drop?

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CAE

CAE (TSX: CAE) fits that setup as it sells training and simulation into a global market. It runs pilot training centres, trains defence crews, and builds full-flight simulators. Over the last year, demand stayed firm as airlines rebuilt capacity and governments leaned into readiness spending. The business still sees quarter-to-quarter noise from program timing, but long contracts and a deep installed base can keep work flowing.

In fiscal Q3 2026, CAE reported revenue of $1.3 billion and adjusted earnings per share (EPS) of $0.34. Free cash flow came in around $411 million, and net debt leverage improved to about 2.3 times adjusted earnings before interest, taxes, depreciation and amortization (EBITDA). It also ended the quarter with roughly $19.2 billion in adjusted backlog, split between about $8.2 billion in civil and $11 billion in defence. At writing, the Canadian stock trades near 34 times trailing earnings, so investors already price in a lot of good news.

MG

Magna International (TSX: MG) offers a more classic currency kicker. It makes auto parts and systems for major carmakers, and it earns a large share of revenue in U.S. dollars. Over the last year, the market worried about uneven vehicle production, shifting electric vehicle (EV) demand, and tariff chatter. Magna pushed back with the basics: cost control, new program launches, and a focus on margin progress.

The Q4 2025 results showed that discipline. Sales rose 2% to $10.8 billion and adjusted diluted EPS jumped 29% to $2.18, while adjusted EBIT reached $814 million. For the full-year 2025, adjusted diluted EPS landed at $5.73 and free cash flow hit $1.9 billion. For 2026, management expects sales of $41.9 billion to $43.5 billion and adjusted EPS of $6.25 to $7.25, plus $1.6 billion to $1.8 billion of free cash flow. The valuation sits around 22 times trailing earnings, so investors certainly can add this to their watchlist.

BBD

Bombardier (TSX: BBD.B) may give the most direct “loonie leverage” of the three. It builds business jets, sells higher-margin services, and has a growing defence business, with a lot of sales tied to U.S. dollars. Over the last year, it leaned into its turnaround narrative and benefited from strong large-cabin demand, while supply-chain hiccoughs gradually eased. Investors also kept one eye on trade headlines, as sentiment can swing quickly in the aerospace sector.

The latest full-year results backed up the progress. Bombardier’s 2025 revenue rose about 10% to $9.6 billion, and adjusted EBITDA reached $1.6 billion. Free cash flow hit $1.1 billion, and backlog climbed to about $17.5 billion, which supports future deliveries. For 2026, management guided to more than 157 aircraft deliveries, revenue above $10 billion, and adjusted EBITDA above $1.6 billion, while free cash flow should land between $600 million and $1 billion as timing normalizes. The stock trades near 21 times trailing earnings, which looks reasonable if execution holds.

Bottom line

A weaker loonie will not fix a weak business, but it can add a tailwind to a strong one. CAE brings global contracts and a large backlog, Magna brings scale and cash generation, and Bombardier brings a cleaner post-turnaround profile with rising revenue and backlog. If the Canadian dollar stays soft, these three Canadian stocks offer different ways to potentially benefit while still owning real operators, not a pure currency trade, for patient long-term investors.