The U.S. economy appears to be slowing down.
In the fourth quarter of 2025, the largest North American economy grew by 0.5% year over year, compared to 4.4% the quarter before. It was a pretty rapid rate of deceleration, showing that even the mighty U.S. economy is not immune to illness.
Indeed, the current U.S. administration has presided over worsening economic fundamentals overall, including a rise in unemployment, a massive rise in debt, and a slowdown in GDP growth. The simultaneous increase in debt and slowing of GDP growth is particularly alarming, as it indicates that the debt is becoming a larger problem relatively to the country’s ability to pay interest.
In principle, America’s economic problems are problems for Canada as well. As our largest trading partner, the U.S. has a major influence on our economic fortunes. Nevertheless, there are some Canadian companies that can do A-OK in the current environment. The following are three of them.
Source: Official White House photo by Daniel Torok
Fortis
Fortis Inc (TSX:FTS) is a Canadian utility company whose revenue performance has historically been remarkably independent of economic conditions. As a regulated utility, it provides an essential service that customers generally don’t cancel even in the worst of economic times.
Why is Fortis such a solid long term performer?
First, its business consists of 98% regulated utilities, which are seen as more stable and reliable than other types of utility services. Second, it has a history of investing in growth. Third and finally, it enjoys the recession-resistant qualities that its sector enjoys, which is a major boon when the economy slows down – as it appears to be doing now.
Metro Inc
Metro Inc (TSX:MRU) is a Quebec-based grocery chain that is remarkably geographically focused. The company sources the vast majority of its products from Canada, and operates exclusively in Canada, specifically Ontario and Quebec. The company’s supply chain is not overly dependent on access to the U.S. market, so any U.S. protectionist measures for dealing with its economic slowdown are unlikely to hit Metro very hard. Likewise, it does not sell into the U.S., so its revenue is unlikely to be impacted by the current U.S. economic slowdown.
TD Bank
The Toronto-Dominion Bank (TSX:TD) is a Canadian bank that does have considerable U.S. exposure, but less than it had in the past. Previously, this bank had an enormous and fast growing U.S. retail segment as well as a $10 billion investment in U.S. brokerage firm Charles Schwab. The bank’s U.S. retail bank was put under an asset cap, meaning it was outgrown by the Canadian and investment banking segments. Likewise, the Charles Schwab stake was sold off. So now, TD has U.S. exposure mainly in the form of loans, which are relatively safe going by current default and charge off rates. Likewise, its Canadian presence has expanded relative to its U.S. presence. It seems like some minor U.S. employment weakness is unlikely to severely harm TD Bank, which has the fundamentals in place to continue growing in 2026.
Foolish bottom line
“When the U.S. coughs, Canada catches the flu.” That’s been the saying for years. Maybe on a macro level, the conventional wisdom is even true. But as the TSX’s 2025 and 2026 performances have shown, it needn’t be true about the stock market. Certainly, Fortis, Metro, and TD Bank have defied conventional wisdom.
