The Canadian Investor - Why BRP Stock Just Crashed & GFL Makes a Huge Acquisition

Episode Date: April 16, 2026

In this episode of The Canadian Investor Podcast, we break down hotter-than-expected U.S. inflation data and why rising energy prices are becoming a growing concern for markets. We also discuss why BRP Inc. stock is down more than 35% and whether the selloff is justified. We also cover strong earnings from BlackRock and ASML Holding, GFL Environmental’s acquisition of Secure Waste, and the sharp drop in Chemtrade Logistics Income Fund after a major setback in Vancouver. Tickers of stocks discussed: DOO.TO, BLK, ASML, GFL.TO, SES, CHE.UN   Subscribe to Our New Youtube Channel! Check out our portfolio by going to Jointci.com Our Website Canadian Investor Podcast Network Twitter: @cdn_investing Simon’s twitter: @Fiat_Iceberg Braden’s twitter: @BradoCapital Dan’s Twitter: @stocktrades_ca Want to learn more about Real Estate Investing? Check out the Canadian Real Estate Investor Podcast! Apple Podcast - The Canadian Real Estate Investor  Spotify - The Canadian Real Estate Investor  Web player - The Canadian Real Estate Investor Asset Allocation ETFs | BMO Global Asset Management Sign up for Fiscal.ai for free to get easy access to global stock coverage and powerful AI investing tools. Register for EQ Bank, the seamless digital banking experience with better rates and no nonsense.See omnystudio.com/listener for privacy information.

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there's going to be some great opportunities for investors this has to be one of the biggest quarters i've seen from this company in quite some time Welcome back to the Canadian Investor podcast. I'm Simon Berger. I'm back with Dan Kent. We're back for a news and earnings episode. Before we get started, just a little bit of housekeeping. I will be hosting while co-hosting a live YouTube on April 17th at noon.

So this upcoming Friday or tomorrow when you're listening to this, if you're listening to this on Thursdays. So I'll be co-hosting that with Dan Foest from the Canadian Real Estate Investor podcast. So if you're interested, make sure you join us. We'll be focusing a bit more on just doing some macro talk here, probably taking some questions too from the audience. We're not quite sure on the format just yet, but I think it's something we want to test out,

probably tweak the format over the next month or so as we see what is working and what's not working. So make sure you join us if you're interested in hearing a bit more of me, especially on the macro front and along with Dan, he's very knowledgeable when it comes to that. So this Friday, April 17th at noon Eastern time. So yeah, aside from that, Dan, anything of no that come to mind in terms of news earnings before we get started? I know I had a difficult time deciding what to put in to this episode.

There's actually been a lot of huge news on the Canadian side of the market. So it should be a pretty good episode. A lot of companies you might not know about as well. Yeah. Yeah. So one, I'm not super familiar. You said it'll be interested. You have a good segment plan.

So I'm looking forward to that. So let's get started here. We have quite deep jam-pack slate. I wanted to do a quick update on inflation here because the Bureau of Labor Statistics in the U.S. released CPI data for March last Friday. And it really wasn't pretty. It might be a bit of a preview that's what's to come next week for Canadian CPI. So inflation jumped to 3.3% for March.

compared to 2.4% for February. So a massive jump. Obviously, this is on a year-over-year basis, but pretty large jump from month to month. Of course, the biggest driver was energy costs, which rose 12.5% while gasoline was up 18.9%. They saw prices of energy jump in March following the start of the Iran War in late February.

Of course, I don't think this is news for anyone. If you've filled up your car recently, you've seen those higher prices in Canada as well. And then if we look at Canada, the liberal government, which just achieved majority as a result of the by-election that happened a few days ago, and of course some crossovers from the Conservative Party since last year's election, announced that they would be removing the federal fuel excise tax on gas diesel and aviation fuel. The suspension will be lasting until Labor Day,

but I wouldn't be surprised personally if it goes beyond that, especially if gas prices stay elevated throughout the summer. I wanted to mention the U.S. CPI data for that reason because I'm sure the federal government knows that CPI will spike in March and seeing what happened in the U.S. I wouldn't be surprised that that was a move that they were just trying to front run that because I think we can all agree that CPI will probably see a pretty big jump in Canada as well when it comes out. So I just wanted to talk about that quickly, not do a deep dive or anything on

the US CPI data, but just to show that it's probably having an impact in Canada with the way that the liberal government reacted here. Personally, obviously, I like it in terms of my wallet. I think it'll be, it's good. I think it's saving about 10 cents per liter, if I remember correctly on gas. Yeah, I think it is 10 cents. I think on gas, it might be different for diesel. For diesel and aviation. fuel but so that's definitely welcome I would still caution people to just remember if they're doing this it also means that they will be bringing in less tax revenue because this is a form of tax so it could have some it will definitely have some pressure on the deficit as well so keep that in mind

whenever you see something there's always two sides of it of course I'm happy on those lower costs I'm sure most people who drive would be but on the other side of it it will likely put some pressure on the rising deficits in Canada. So just wanted to mention that. Anything you wanted to have before we move on to BRP and the news around and the reason why the stock is being hammered today? No, I'll dive right into BRP. This happened this morning, so I actually don't have any like solid notes on it, but just

from quick reading this morning. So it's down 35%. And, you know, just last week, I had kind of talked. talked about, actually, yeah, it was last week. I had talked about kind of the blowout quarter that they had. And it was kind of a blowout quarter. Like the company was doing very well. You jinxed it, Dan. I completely jinxed it. It's like what a wild, wild market this is. Like, I don't know just the ability to kind of cave a company like this. Well, it's because of tariffs. So what ended up happening was, so they reported and then on April 6th, there was an amendment

to how the tariffs apply. It was in early April as to how these tariffs apply on their on their vehicles. So somebody looking quickly at like the numbers might notice like they had a 50% tariff before and now they have a 25% tariff. So like why why is, you know, why is this negative? Well, prior to this, the 50% tariff was just on the metal content of imported products. whereas now they've kind of just said, we're going to tariff 25% on the total value of the vehicle. So it's huge.

I think they expect it's going to hit the company in excess of $500 million. So like I had mentioned last week, like this company was going to see a $450 to $500 million tail win because of the inventories, how the inventories were normalizing, all that type of stuff. This just pretty much wipes that out and then some effectively. because of, you know, the fact that their, their vehicles are going to be tariffed the entire vehicle.

And they manufacture primarily in Quebec. So a lot of their products are hit. And I mean, like, to me, that's kind of all I'll talk about, BRP in general. But like, what does the company do if this doesn't go? The one thing I will say is, like, if this, like, Trump changes the tariffs, these tariffs change all the time. So, like, I'm still holding because. who knows next week, you know, if they get rid of those large tariffs, I mean, the company probably doesn't see this type of headwind. But, I mean, if they don't get rid of them, I mean, what does BRP do?

Like, I, they would have to move manufacturing. Yeah. To the, to the U.S. Like, in reality, like Trump, if this persists, like Trump is kind of getting what he wants here, because how else this. this wipes out almost their entire earnings. So like this is like it's a material impact for the company and the only I mean, again, I just quickly read it this morning, but the first thing I thought of is they're going to have to get manufacturing out of Canada and into the United States.

Like what else would be the solution if these never go away? Because they can't continue to operate with a 25% tariff applied to every, every wreck vehicle they sell. It's just not, it's not sustainable. Well, I mean, one thing to keep in mind is I think the Kuzma or the free trade agreement is supposed to be, I think talks for new negotiations. Yeah, or this year. So this summer. So that may be something that will be negotiated as part of that. So I could see a BRP doing a waiting C until then. Maybe if they get some assurances, I'm not quite sure how they would get those, but maybe if They get some assurances from whomever will be doing the negotiation on the Canadian front.

That that will be one of the items. I'm not quite sure, but that could be a silver lining because, of course, moving manufacturing to the U.S. won't be a cheap endeavor for them. So that's going to, there's going to be some costs related to that, training the staff and the employees and so on. But you'd want to avoid that as much as possible. It's not great for those who are employed by BRP in Canada because clearly if that happens, there's going to be a lot of job losses here related to that. Yeah, and I guess the final thing I'll mention is they, like, they suspended guidance as a result,

which kind of gives me the impression that they don't really feel it's going to go away anytime soon. Other than that, like, if they did, why, why wouldn't they just kind of wait it out? Yeah, but I think suspending guidance is probably just prudent. Yeah. Because even if it might go away, they, at this point, you're suspending guidance because you actually don't know. Yeah, you're guiding because you have a general. whole idea of where things are going. If you suspend guidance just means you don't know, right? We saw that during COVID early on. A lot of companies were suspending guidance because they just didn't

know where things were going to go. And I think that wouldn't be no different. I'm not saying it's going to be a good outcome. I'm just saying it's an uncertain outcome. And that's probably why they just pull guidance. Yeah. So like in the span of three weeks, they report a blowout quarter. they kind of, you know, upbeat guidance and then now it's, it's all suspended because of, because of tariffs, because of that, you know, kind of reformatting of the tariffs a few weeks ago. So, yeah, wild markets. I think it's maybe just a wrap up here before we move on to your next point. I think for investors, just a good reminder how important it is to be diversified.

No matter how strong your conviction might be in a certain company, a stock or a certain asset, whether it's gold, Bitcoin, U.S. Treasury. you name it, whatever the asset might be, being diversified avoids you getting wrecked when you have something like that happens like that. Can you imagine if you had like 20% position in BRP? And this happens? Like that's a big hit to your portfolio. So I think it's just a reminder being diversified and how important that is. It just gives you some insurance in case your premise or something out of left field happens. And let's be honest, the current state of the world economy and geopolitics, there is a lot more uncertainty and weird

things like this can happen out of left field. Clearly, BRP had no idea because they would have mentioned something in their latest earning. So probably just a takeaway for that for me is just reinforcing how important it is to be diversified. Yeah, like BRP, I own BRP I have for a few years. It's like one and a half percent of my portfolio. So it's kind of immaterial. I think I'm still green on the day, despite it being down 38% now it looks like. But yeah, it's, this environment is very, very difficult to navigate, especially for companies like this. Having cash on hand is essential for any business. Traditional business accounts hit you with high fees while paying little to no interest on the cash you need for day-to-day operations. That was our experience too,

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Go to shopify.ca. That's shopify.ca. Cheching. So moving on to the acquisition in the waste space. So this one is very interesting. GFL environmental is buying secure waste infrastructure for $6.4 billion. So the cost is for 2475 per share for Secure. So at the time of writing this, I would have wrote this yesterday. Secure is trading for around 2277. I think it's still trading at a pretty big discount to the acquisition price. And I'll kind of. get as to why in a bit. But the acquisition will be 80% GFL shares and 20% cash. So if you own secure, you can select all cash, all stock, or even a mix. And it is expected to close pretty quick back half of 2026. And this is expected to be immediately accretive to GFL, meaning it'll add to free cash flow per share despite the dilution. Now, it does say adjusted free cash flow per share.

so I didn't really have time to dig into what type of adjustments would be made. But sorry if I'm coughing here a bit. I'm developing a bit of a sickness. But GFL is the fourth largest waste collection company in North America. So it's much the same as the other waste collection companies. Small tuck-in acquisitions they've made, I think it's just under 300 of them since being founded. The thing is this is kind of far from a tuck-in. This is pretty sizable.

GFL, I think, has a $20 billion market. a cap or so, whereas, you know, they're buying secure for, for 6.4 billion. And whereas a company like waste connections has around 90% exposure, 85 to 90% exposure in the US, GFL is around 65% so much more exposure here to Canada and primarily in, I guess you could say like industrial waste. So that's kind of what secure specializes in as well. It doesn't have really the residential waste exposure or like a waste connections. And where this does get interesting is both of these companies have had a history of being forced to divest assets because of monopolies effectively in this area.

And, you know, because both of these companies have so much, let's say, oil field or industrial exposure, the gap and share price you're seeing right now, I think at least is the market kind of pricing the fact that this won't go through or it might go through. but GFL might have to sell off some assets to other companies kind of, you know, divest that way. So back in 2021, secure energy merged with Tervita. So these were the two largest oil field waste companies in Canada. And I don't know the entire story and how it all went down, but effectively the Competition Bureau forced secure to sell off some of its facilities to waste connections because they just felt like, you know,

there wasn't enough competition. there. And GFL had these issues as well. So the Bureau forced them to sell some waste facilities and tank farms here in Canada. So I mean, the question here now is what is the likelihood this deal goes through? I mean, you have the Bureau harping on these companies for many years about effectively having a monopoly in this business and now they want to merge or I guess GFL acquiring them. So I can't imagine this doesn't go through some pretty intense regulatory hurdles. And it looks like GFL is buying them for around 13x EV EBita. I'm not really sure what the right price to pay here is.

I don't know like what industrial waste companies trade for, but if you look to a company like waste connections, they often trade north of 15x EV EBTA, but waste connections and like waste management, they have a lot of that residential waste disposal, stuff like that, stuff like is not as cyclical, whereas secure is a very,

heavy industrial, you know, oil field type waste company. So I'm going to guess the market believes they overpaid quite a bit because GFL was down. I don't know how much it's down this morning, but it was down about 10% after they made the buy. So yeah, the market didn't like the acquisition. It looks like GFL. In the last, I'd say it's down about like probably, yeah, 10%. 10% and 12.2% the last five days. So.

Yeah. I mean, the other element of this could. be, you know, they are issuing 4.2 billion in shares, just quick math on that, 80% shares on a deal where they only have a $19 billion market cap. So yeah, I mean, the kind of, the smaller tuckins in this space are, you know, they are likely to go unnoticed. But when you make a big move like this, I can't imagine, you know, regulators won't be looking at it. If the deal does go through, I would imagine, you know, it won't be the end of it. I would imagine, you know, just like they have in the past, they'll kind of force some of these companies to maybe

sell off Canadian assets, probably to a company like waste connections. I would imagine they're probably just going to be sitting here waiting to buy some of these, but it's kind of an interesting situation, like the arbitrage in the share price. There is quite a bit, but yeah, it's, I don't know if it's going to go through quick close, even if it does go through. I expect it's not really going to be the end of it. Okay. No, that's a good overview.

It's always interesting. The waste collection sector, I know you own waste connection Canada or waste connection. or waste connection. Yeah. That's it, right? Just waste connection. So I know you own a waste connection. Actually, he's been a bit on a downturn recently, too.

Is it being a downturn? Yeah. Yeah. Is it more of a just evaluation thing in terms of waste connections? They're kind of getting hit by volumes, like lower volumes. And during the pandemic, they offset a lot of that with increasing prices. So they just need volume to pick back up. Obviously, construction is poor.

I mean, the economy. overall in terms of that type of activity is poor. So yeah, a bit of a valuation premium, I guess. Like markets are obviously pretty risk on right now, too. So people don't want to own garbage companies when that's happening. Hey, if you're looking for trash, I may be a good time to start looking at waste connection. So let's move on here, completely different type of business. BlackRock, the world's largest asset managers. Revenues were up 27% on a year-over-year basis,

just to be clear here, while net income was of 46. for the world's largest asset manager was led by higher asset under management. So AUM, organic fee growth and higher technology services, services, acquisitions, and subscription revenues. AUM went up 20% to 13.9 billion. However, it's slightly down than Q4. I believe Q4 was their highest ever, if I remember correctly. So it's slightly down from Q4 where it had surpassed 14 trillion and I think I said 13.9. So it's 13.9 trillion, not billion. They saw record inflows for I shares, ETFs during the quarter. All asset types saw higher AUM and QM and the first quarter compared to last year with digital assets. So thing coin Ethereum, for example, being the

only category that was flat. And I know you own BlackRock, right? If I remember correctly. Yeah. Yeah. Results were slightly down in most areas compared to Q4. of last year, so keep that in mind. They saw 8% growth in organic fees and margin expansions during the quarter. They now get 78% of their revenue from base fees, which are just the basic AUM fees charge compared to 73% in Q4 of last year. Another types of fees, for example, would be like performance fees, would be an example of fees that they would get.

I was really interested in hearing what Larry Fink had to say on the call, so Larry Fink, think of course the CEO of BlackRock and it was pretty pretty interesting in terms of call so first you mentioned on the call that the world a lot of clients are mentioning to him that the world feels different not just uncertain but different and i mean i don't disagree with that i know you and i have texted quite a bit on the whole situation in the middle east and my stance is that we're really seeing a changing order for the world. Like what we've known in terms of the U.S. being the hegemon and the undisputed superpower of the world over the last 40, 50 years is just changing.

And you're starting to see that affect trade quite a bit, which will affect markets in turn. And I think this is one thing that a lot of retail investors are just missing right now. I think they're just saying, you know, oh, the last 20, 30 years are just going to replay exactly. how it is and I think the U.S. is still the superpower, but there are other powers in the world that are emerging. Side note, just that those were my thoughts. And the world is, back to Larry Fink, you said the world is reorganizing on self-reliance. So more and more, if we think about the pandemic and how pre-pandemic it was just in time

manufacturing, right? You wanted to get the cheapest cost. It was all about globalization. So you go to the cheapest location. where now I think you're seeing more and more redundancy build in. So it's not always about the cheapest cost is being able to be self-reliant and be prepared if an event that you can control happen. For example, a lot of European countries are not really well prepared

for the energy shock that we're seeing right now. And I think it's opening a whole lot of eyes. The next thing here is clients rotated towards more international exposure in the quarter. He said that a lot of the negative headlines or focus on private credit had been really focused on funds that are targeting retail investor, which is about 25% of the industry, according to him. However, demand is accelerating amongst institutional investors. The bearish sentiment right now is offering some compelling opportunity for private credit for investors as yields are higher than they were back in Q4. So definitely pushing back on the private credit narrative. however, they have made some private credit bets right in last year, especially with HPS.

So I would, I like to listen to Larry Fing, but I would still take what he's saying on this front with a grain of salt because he's definitely, he's got invested interest in private credit performing pretty well. And I guess the last thing you mentioned that of note, and I think that's a little bit worrying, but that's my own personal view, is he said another thing. tail-in for private assets, so not just private credit, but also private equity, is that the Department of Labor in the U.S. proposed a rule that would provide a framework for private assets into their target date funds for 401Ks. So 401Ks, I know it's a Canadian podcast, these are just retirement plans. So just think about, for example, RSPs or locked in RSPs or defined contribution pension plans. So think about these type of investment, especially those that are sponsored by employers. so would be the equivalent to 4-1K here.

So these could potentially be part of target date funds. These target date funds are funds that adjust over time the weighting of assets. So for example, you might have more equities the younger you are. And the closer you get to retirement, the equities slowly kind of peels back and more money goes towards fixed income to lower the overall risk. So what they're saying is that there could be some potential here to have some private assets within those target date funds. And those target date funds, so the life path suite of fund for Black Rock has more than

600 billion in AUM. So it's not a small part of the business either. Of course, when you have 14 trillion or so or just shy of it in AUM, 600 billion might not look like a lot, but it's still something that could be a tailwind for Black Rock. Yeah, they're going heavy into private credit. So, I mean, I can't imagine he ever mentions anything bearish. about private credit. Yeah.

Yeah. I mean, it is also the idea that not all private credit is the same. I mean, it's not. But yeah, they made HPS acquisition and then they bought, I still can never pronounce it pre.

Preckin or like prequine or whatever, which is like a private, like there's not enough data on. Yeah, I was going to see that's more analytics, right? Yeah. Yeah. So obviously there's not a lot of data on private credit,

private equity. So this is kind of a company that provides that type of data that, you know, people can now access to get a bit more transparency about the funds themselves. So, yeah, private credit, private equity, all that type of stuff is a big, big growth factor for them. It has been. They've made some big acquisitions over the last few years. Yeah, it was, I don't know, I haven't had a time to look into the quarter. I'm actually going to dig into BlackRock and ASML after the podcast. So I'll have to take a deeper look. But it looks like a pretty good quarter. I think the stock is up today. Yeah. Yeah. Yeah, a pretty good quarter overall. I

Yeah, if I were a shareholder, I'd be pretty happy with that. Of course, BlackRock, it's going to be dependent quite a bit on how the market is doing. Q1 was kind of up and down a little bit, but overall, not a bad quarter if I had to say. Having cash on hand is essential for any business. Traditional business accounts hit you with high fees while paying little to no interest on the cash you need for day-to-day operations. That was our experience, too, until we sweep. to the new EQ bank business account. Now, every dollar earns high interest with no monthly fees and no minimum balance. You also get free everyday transactions like EFTs, bill payments,

mobile check deposits, and 50 outgoing and 100 incoming free interackey transfers. And to sign up, quick and fully online, no branch visits because, let's be honest, no business owner has time for that. We use it for our own business and it's the first. first account that actually helps our money work harder while keeping operations simple. Check it out today at EQBank.ca slash business. There is an old saying in investing. It's not about timing the market, but time in the market. The most successful investors aren't usually the ones trying to catch every top and bottom. They're the ones who spend the most time in the market.

I've been a quest trade user for over five years, and the reason I stick with them is that they remove the friction of regular investing. With no commissions on stock and ETF trades, you don't have to wait until you have thousands of dollars saved up to make a move. You can contribute small amounts regularly and keep your portfolio growing consistently, removing the stress of trying to time the market. And they keep making it easier to build a well-rounded portfolio. Soon, you'll be able to trade precious metals through Questrade, giving you even more ways to diversify. Questrade, makes the whole process seamless, allow you to focus on what really matters your investment strategy, not trying to avoid fees. Ready to invest, head over to questray.com, open and fund your account

with code TCI and receive $50. Conditions apply. Starting something new is uncomfortable. I remember launching the podcast and thinking, what if no one listens? What if it just doesn't work? That doubt is part of it, and honestly, starting a business isn't easy. You're figuring out things on the fly, wearing a bunch of hats, and hoping it all comes together. If you're in that phase right now, trying to build something and actually sell products, having the right tools makes a huge difference. That's where Shopify comes in. Shopify gives you everything you need in one place. You can build a clean online store with ready-to-use templates, manage inventory, payments with shop pay, analytics, and even use built-in AI tools to create product descriptions and improve your listings.

It's built to help you go from idea to first sale. It's time to turn those what-ifs into Cheching. Sign up for your $1 per month trial today at Shopify.ca. Go to shopify.ca. That's Shopify.ca. Chuching. Now let's move on. Did you want to do, should we do ASML or go to Kemp Trade? I think we've got time for both. He can go into ASML and then I'll quickly go into Kemp Trade. Yeah, so ASML, of course, we try to look at ASML almost every quarter,

one of the most important companies in the world. And one of the companies that's, if you ask a random person on the street, they probably would have never heard of it. So it's funny, it's a massive company. most of these comparables that I'll talk about are compared to Q4 of 2025. And overall, I have to say, was it was a pretty good quarter for ASML. Sales were down 10%, but bear with me, not that bad here. Despite selling 29% less new lithography system than they had just last quarter.

So this is likely just a reflection of more EUV system being sold this quarter versus is the last one. They sold 16 EUV system this quarter and 14 last quarters and these are the most advanced systems that they sell. There is this, this is extreme ultraviolet system and DUV is the deep ultraviolet.

The EUV is what ASML has a monopoly on. So they're the only ones that actually manufactures these type of system and the DUVs, there's a few other manufacturers, but it's only a small group of manufacturers. So it's really

Yeah, it's a monopoly. I mean, I don't know how else to put it when it comes to EUVs, but these EUVs are much more expensive than the DUVs. So that would explain the sales being down 10% despite them selling 29% less a new system. 66% of revenues came from EUV system versus 48% last quarter. 45% of revenue came from South Korea. So I think it's safe to assume that the majority of it was likely purchased by Samsung and the rest by S.K. Heenix, the memory maker.

51% of sales were tied to memory system compared to 30% for the last quarter. So keep in mind, I had an episode or we had an episode where I was talking about memory and DRAM shortages and higher prices. And I think this is probably these companies starting to invest into more production capabilities here, which likely took some time because it's notorious. cyclical, but memory, these memory system is for things like DRAM or high band with memory, which is used for AI, while logic is for the production of things like GPUs and CPUs. So that's how I would, just the big buckets out to place them here. And only 19% of sales went to China during the quarter.

Install base management, which is a very sticky and stable, and actually it just goes kind of up into the right in terms of revenue. was up 17%. It's been a steady increase over the last five years. I think it's compounded at more than 10% over that time period. I don't have the numbers right in front of me, but I remember seeing that. They did a small increase for their 2026 cell guidance as well. So they went from guiding a mid range of 36.5 billion euros to now 38 billion euros.

So it's looking pretty good. Unfortunately, I could not find their backlog. So I look for about like 10, 15 minutes. Usually they make it pretty upfront. So maybe I just missed it, but I couldn't find the backlog in order here. And they continue to return money to shareholders via dividends and buyback. They bought back $1.1 billion worth of stock in the first quarter and planned to increase their dividend by 17% this year. So very solid quarter for ASML.

I mean, I think for me this is a company. I still follow pretty closely because amongst other thing the podcast, but I also own it. know you're a shareholder as well. And if there is a company that I'm very confident that it's going to have a lot of, that will have solid prospect at least two, three, four, five years down the line. Further than that, it's probably harder to predict because of advances in technology. But until then, I mean, with the monopoly they have, and to my knowledge, there's no other company that is coming even close of having EUV system other than ASML. Yeah, and I think there was a lot of commentary on like China kind of, you know, getting into the, you know, developing these, but they said like the in order to do this, it would take him like a decade. And even then you then have ASML who has a decade to improve theirs. I know they have that new EUV machine. I think it's like the EXE 5,000 or something, which is like it's over $400 million or something for a single machine. It's crazy. But yeah, I mean, the.

the base management, which is effectively like the maintenance, obviously when you have a monopoly on the production, like these are massive machines. Like if you're paying this amount of money, you're going to get ASML to come in and, you know, do the maintenance on them, things like that. So that's why that's sticky, high margin, obviously, and growing at a, at a pretty good pace. But yeah, again, I haven't looked into ASML. I plan to do it after this. It looks like it was a pretty good quarter, but it's down six or six and a half percent. But it's also up. like 120% over the last year. And I think it's up 35 some percent this year alone. So not really surprising to see a bit of a sell off unless it was an absolute blowout, which I don't think it was.

No, it wasn't a blowout. I think it's more just a company continuing to be pretty steady. Yeah. I think that's essentially where it is. It's not a cheap company, one that I've owned for for quite a couple of years now, if not more. So definitely, you know, to me, I, It was a no-brainer back then with the kind of valuation it's trading at. I wouldn't say it's a no-brainer right now. But definitely a company for those interested that do your due diligence, but on a pullback, it could be a good point to start a position. So aside from that, let's move on here to the last thing on our docket today.

Cam trade logistic rezoning declines. So I think there are fears that we might see this company relocate to the U.S. right? Well, that was kind of my speculation. I mean, there's nothing there now, not even necessarily in the U.S., but they need to try to find a way to get this facility elsewhere. This is kind of actually a company that has, it's a small amount of AI exposure, but even a company like this has a bit. I'll get to that at the end of it. But it's a pretty crazy situation in BC. So this is a Canadian listed company. It trades as like a unit. So I think the ticker is C. e. And it deals with a wide variety of chemicals. Like we're talking like chlorine, caustic, like sulfuric acid, things like that. So they have a deal in place that allows its facility in Vancouver, I believe, to produce chlorine.

However, the lease is up in 2030 and the council rejected a rezoning application for the company. So effectively, like I don't think that. facility purely produces chlorine. It produces other stuff, but they won't be able to produce chlorine there after 2030. And just not even from a company perspective, like obviously it's not good for a company like chem trade, but even for the country overall. So this plant is the largest in the country. So it produces over 40% of the country's total chlorine supply, and it supplies over 70% of the chlorine to Western Canada. So I think right now, like 95 plus percent of municipalities use chlorine in the water. And the plant has been operating since 1957. So there's a lot of complaints

from people in Burnaby, apparently around the production of it. They say it's not safe. In fact, they called it intolerable, like the risks of that plant being there is intolerable. And it's a pretty big chunk of the company's revenue. So this, plant not being able to make chlorine is kind of a big deal. It dropped, I think it was 18 to 20 percent. It dropped yesterday. And if this closes, it would close down one of only two class one chlorine plants in Western Canada. So it's a pretty interesting company. It used to be a high yielder, but some very good results, you know, and share price appreciation over the last while has kind of caused it to be like a mid-yielder, I guess you would say. It's kind of one I talked about.

over at stock trades in 2020 because they had some difficulties and ended up having to cut the dividend and you know they've kind of recovered since but i'm pretty sure from what i read and i know we had talked about this before we were recording i'm pretty sure the federal and provincial governments are both supporting this plant they do not want it to shut down but apparently and again i like i might be wrong about this but they're saying that at the municipal level that is where these agreements are made. Like they can't do anything about it. So apparently the community has been kind of pissed off about this thing for many, many years. And the lease agreement had the idea that they had to shut it down in 2030. It was baked into it long ago, probably just to make people happy.

That's what I'm guessing. They added that contingency in it to make people happy. And apparently at the time assigning the lease, the area was kind of becoming increasingly more residential. So kind of make sense. I don't know where it's located, but if residential areas are bordering it, it's a bit odd. This apparently it's a big facility with like chlorine storage tanks, open air loading facilities. So the trains are like loaded and open air. They did promise that if the lease was going to be renewed, they would upgrade the safety systems. They would kind of demo some of the old buildings and they would make it a closed space for the rail cars to be loaded. But apparently the, the municipality, I mean, didn't care. This is kind of a really,

interesting case of NIMBY, like the, the nod in my backyard. I mean, we spoke a lot of, when we talked about the waste management companies, you know, landfills are definitely, you know, a NIMBY type situation, but landfills are also not a national scale issue. Like, they don't, you know, if they shut this plant down, it's, they're going to have to source chlorine elsewhere, likely outside of Canada. So. But keep in mind, though, like municipalities are creations of the provinces, right? So you can have the province step in and basically tell them this is happening. Yeah. There has been instances of that in Ontario. For example, you had here some, the city of Ottawa, and I think cities across Ontario were installing like speed cameras. So in like safety zones that's

called. So most of it were like school zones or like kind of high residential areas. And Doug Forge is basically said, I want those taken down their cash grab. And even though the police forces and municipalities weren't happy about it, they had to take them because it came from the provincial government. So if the province really wants to, I think they could tell them, you know, this is happening. Yeah. And I mean, I'm kind of wondering if the province, like the federal government has to care more than the provincial.

I would imagine so because, yeah, it's, I'm going to go out and say, I did not know. that, you know, they provided that much of the product to Canada, but obviously, yeah, you have a national scale issue. And you kind of feel bad for the people. Like, obviously, like, I wouldn't, I wouldn't want to live by this thing. It's like, you don't want something that, something like that in your backyard. But I mean, the residential area was built up around the plant, not the reverse. So you can kind of see how, you know, chem trade is, is kind of angry about it, too. But I mean, there's pretty much three things that can come out of it. They can negotiate with the municipality.

They can build a new facility elsewhere or Canada has to start sourcing its chlorine internationally. And I mean, we know how global trade is going these days. It kind of comes back to what Larry Fink was saying on the call, right? It just comes back to being more self-reliant. Yeah. And whether people like it or not, I look, chlorine I think is an important chemical. And that's what we're seeing with the Middle East right now with the Strait of Hormuz.

It took us dislong to talk about it. But you're seeing that a lot of countries are dependent on the Middle East for chemicals. And you're going to see more and more national governments prioritizing self-reliance. And I think this is just another example. Yeah. Yeah, I don't know. I don't know what's going to happen with this. But in terms of the AI exposure, so I did not.

know this, but Chemtrade, they make ultra pure sulfuric acid, which is apparently a chemical they use in semi-manufacturing. So like cleaning and etching wafers. So apparently you can't make chips without it. Not chemtrade's product, but just the chemical overall. So the company is just like semi-conductors. Yeah. Not yeah. Yeah. Yeah. We don't want sulfuric acid in our I know, I know. You will definitely eat only just one, if that is the case. But yeah, they're building like numerous facilities to pretty much solely provide this to the chipmakers. It's like it's a very tiny portion of revenue.

I'm pretty sure right now, like the vast majority of their revenue is in stuff like this, like water treatment, pulp and paper type stuff. But yeah, they're, they're supplying the chemicals. So it's an interesting element about them. I don't know where this will go. This is definitely not the end of it. it, there's no way that, you know, they just reject the rezoning and force the place to close in 2030. I imagine you're going to hear a lot about this over the next while. But yeah, that's it for me for chem trade. No, I think that's really interesting. I think we'll see more and more of that,

like I just said. It'll be like obviously the NIMB issue. I can understand why people would not, or residents would not be thrilled about having this chemical plant not far from them. But at the end of the I think you'll see more and more national interests be at the forefront of governments around the world, Canada included as well. Obviously, we have a new dynamic now with a majority government. So I guess we'll have an election in three years now instead of who knows with a minority government, but it'll just be interesting from an observer standpoint, not to get into politics, but if the Carney government kind of starts doing things a bit differently or maybe faster because they are a majority government, it'll be fascinating to see. Again, very happy about the tax

break for gas. It'll be slightly less painful to fill up the car and we don't drive a whole lot. So I can see that people who fill up weekly or multiple times a week, it can make a pretty decent difference. So I definitely understanding for that. Yeah. Yeah. The one thing I'll say about this, like in terms of the government, like I wonder if they would, if this was like, not going to happen if this facility was shutting down if they would give chem trade money to put it elsewhere you know kind of help assist in the building of of the plant elsewhere or if they think you know they could possibly source it internationally maybe they don't need the plant if that's the case that's bad that's bad i don't think that's happening if i i think i think though my

i would bet more on the government making sure that it stays in Canada whether is there a new location. Yeah. That would be, I think we're just, I mean, I think it would be stupid not to. Yeah. That's my own honest assessment with what like, what we've been seeing over the last like couple of years like or even since COVID, right? Like do you really want to be reliant on other countries?

No matter how close you are with those countries right now, we've seen how quickly this can shift with the U.S. and whoever's in power. I think you'd be, you'd have to be. blind to not notice how the dynamic has changed, pretty much since, really since COVID, right, since the start of COVID and all we, and all the issues we saw with protective equipment early on. And then things have just continued happening for different kind of items and critical minerals and so on. So I think for me, it's, I think you have to think strategically on a national basis. I think you, you have to, if not, you're not paying attention. Yeah. Yeah. And I mean,

obviously the worst case situation for chem trade is, they have to front the bill to put it elsewhere. And I mean, I guess in that instance, they could just say we're not. And then it becomes an even bigger issue. I don't know. It'll be an interesting situation to see what happens over the next. I mean, I guess they have four years, but they really don't because if they're going to close this down, like, they need to kind of get moving on getting something else up soon. So yeah.

Yeah, that's all I got. Okay. Well, yeah, that's a good point to wrap it up. So definitely fun when we have more news and earnings, obviously, with. The year so far, I have to say, every time we don't think there's going to be a whole lot of news, there's just something new that happens, whether it's the BRP thing, whether it's the waste connection, not waste connection, but GFL acquisition, or if you're thinking about even like the CPI data, like or something that Trump says that impacts global or Canadian markets,

there's always something that seems to be happening. So we're not lacking content here. Hopefully you enjoyed this episode. As a reminder, you can join us on Join TCI. if you're looking for more content from us, the podcast feed ad free, and our monthly portfolio updates, you can find that at joidtc.com. If you'd like to join me and Dan Foch will be live just as a reminder here on Friday, April 17th at noon.

So join up. I don't know how many people there's going to be for the first few. So if there's not that many people, there's more chances that we answer your questions. And again, we're not quite sure about the format. So we'll see what people like. so make sure you join us. But if not, hopefully you enjoy the episode and we'll be back for another one on Monday.

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