The ongoing trade war and geopolitical tensions have increased the risk of recession, especially if inflation surges over the next 12 months. Central banks globally will be forced to raise interest rates amid an inflationary environment, which will drive unemployment higher and impact profit margins across sectors.
When the economy softens, I want to own businesses that people cannot live without. These include companies that are part of recession-resistant sectors such as utilities, healthcare, and consumer staples.
Here’s why two TSX dividend stocks remain core holdings for me right now: Fortis (TSX: FTS) and Metro (TSX: MRU).
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Why Fortis fits a slower economy
Fortis is a rate-regulated electric and gas utility with operations across Canada, the United States, and the Caribbean. Roughly 99% of its revenue comes from regulated assets, which means rates are set through long-term agreements with regulators.
In its second quarter of 2026, Fortis reported net earnings of $396 million, or $0.78 per share, up from $0.76 per share from a year earlier. The company has invested $2.7 billion into its systems through June and remains on track to spend $5.6 billion for the full year.
CEO David Hutchens made the point that matters most to income-focused investors on the company’s earnings call.
“We have demonstrated that we can grow our dividend responsibly, having increased it for the past 52 consecutive years while maintaining a disciplined approach to balance sheet strength,” Hutchens said.
The company recently received government approval in British Columbia to expand its Tilbury LNG facility, a project that could add roughly $2 billion to its regulated rate base over time. Management expects to fold updated cost estimates into a new five-year capital plan this fall.
Sales into the marine fuel market from the existing Tilbury facility have already lowered customer rates in British Columbia by about 1.5% since 2024, and a separate pipeline project is expected to deliver a similar benefit once complete.
Utilities that can grow while easing pressure on customer bills tend to keep regulators and shareholders on their side.
Why Metro is a top TSX stock
Metro runs a large network of grocery stores under banners including Metro, Super C, and Food Basics, along with Jean Coutu pharmacies concentrated in Quebec and Ontario.
In its most recent quarter, Metro grew sales 4.1% to $5.1 billion. Same-store food sales rose 1.8%, while pharmacy same-store sales jumped 5.1%, helped by a 6.1% increase in prescription sales. Adjusted earnings per share climbed 8.8% to $1.11.
What stands out is that Metro reported these numbers while managing a labour strike in its Quebec operations that began March 30 and disrupted produce distribution right before Easter. CEO Eric La Fleche described the environment plainly on the call.
“Competitive environment remains intense but rational,” La Fleche said, adding that value-seeking shoppers continue to favor Metro’s discount banners and private label products even as they pull back elsewhere.
The trade-down behaviour is what you expect from a grocery operator during a slowdown. When shoppers get more careful with their money, Metro’s discount formats and private label lineup capture that spending rather than losing it.
The company also kept buying back shares and issuing debt at reasonable rates during the quarter, a sign its balance sheet is not under strain.
The Foolish takeaway
Neither Fortis nor Metro will deliver explosive growth. However, both companies sell products that customers need regardless of what happens to interest rates, jobs numbers, or GDP.
Fortis offers a regulated, visible path to rate base and dividend growth through 2030. Metro offers steady sales growth from food and pharmacy demand that does not disappear when times get tough.
