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The RBC Capital Markets Canadian Industrials Conference will be held May 13-15, 2025 in Toronto. At the conference, we expect dialogues with senior executives from Canada’s leading industrial companies to yield in-depth insights which will sharpen analytical perspectives and shed light on strategic decision-making in this dynamic sector. Below, we summarize key themes, opportunities and challenges for the North American industrials sector from a roundtable discussion with Walter Spracklin (Co-Head of Global Industrials Research and North American Transportation Analyst), Sabahat Khan (North American Waste, Engineering and Diversified Industrials Analyst), and James McGarragle (Canadian Aerospace and Diversified Industrials Analyst).
Transportation: Navigating a freight recession and shifting trade policies
Walter Spracklin, opened the discussion by addressing the ongoing freight recession, which has persisted for three years. He attributed this downturn to lower freight volumes, overcapacity in trucking, and declining truck pricing. At the conference, attendees can expect to hear insights into the demand environment from companies at the forefront of the North American shipping industry.
Spracklin also highlighted the evolving trade policy landscape, which has been a focal point since the election of U.S. President Donald Trump. He emphasized the importance of understanding shipper behavior to identify the opportunities and challenges in this shifting environment. Additionally, he previewed company-specific updates, such as Canadian National Railway’s operational focus, Canadian Pacific Kansas City’s revenue synergies, and TFI International’s strategies to overcome recent challenges.
“Tariffs and trade policy have also been front and center since the election of President Donald Trump. There are so many nuances to how this may impact freight transportation companies as well as the broader economy. Furthermore, insights into shipper behavior are paramount to finding out who wins and who loses.”
Walter Spracklin - Co-Head of Global Industrials Research and North American Transportation Analyst
Waste, Engineering and Diversified Industrials: Resilience amidst macro volatility
Sabahat Khan, shared his observations on how macroeconomic trends are impacting these sectors. He noted that waste companies tend to outperform during periods of macro volatility, thanks to their defensive characteristics and stable demand from residential and commercial customers. This resilience has been evident through the first half of the year, leading to strong investor interest, particularly from outside North America. Khan pointed out that the most cyclical exposure for waste companies lies in construction-related volumes, which have remained muted.
Turning to the engineering sector, Khan explained how global engineering firms have evolved into capital-light consultancy businesses with diversified exposure across regions and markets. This balance between public and private sector clients provides a buffer against economic volatility. While concerns about DOGE-related spending cuts have created some uncertainty, Khan noted that infrastructure investments remain largely unaffected, and engineering firms' diversification may mitigate volatility and create consolidation opportunities.
Canadian Aerospace: Managing through the turbulence
James McGarragle, highlighted the recent sharp decline in Canadian consumer confidence, which dropped 32% between January and March, potentially signaling a contraction in spending—particularly in travel. This poses a significant risk to the Canadian airline industry, a topic that will be explored at the conference.
McGarragle also addressed supply chain disruptions, including labor shortages, supplier constraints, and extended lead times, which have hampered production efficiency in the Canadian Aerospace industry. For instance, Bombardier’s engine supply issues have pressured margins, while CAE has reported reduced demand for commercial pilot training due to aviation production delays. These challenges could delay deliveries for airlines like Air Canada, inflate maintenance costs, and potentially limit long-term capacity growth. Our upcoming conference will facilitate discussions on how the companies are adapting to these trade uncertainties and supply chain challenges.
On the trade front, McGarragle noted the stabilizing effect of customer compliance, which shields goods from Canada and Mexico from U.S. tariffs. However, he emphasized the need for companies to remain vigilant as trade policies continue to evolve.
Looking Ahead to the Conference
Our 2025 Canadian Industrials Conference will serve as a platform for industry leaders to discuss these trends and share strategies for navigating a rapidly changing landscape. RBC Capital Markets clients will gain valuable insights into how companies are adapting to macroeconomic headwinds, supply chain complexities, and shifting trade policies—ensuring they stay ahead in this dynamic environment.
