PV, Mit & Jeff
The trade war just cost Canada $18.5 billion in lost exports to the U.S. Steel and aluminum producers alone lost $8.8 billion relative to last year. The average Canadian household is absorbing $1,700 to $2,000 in higher annual costs. And the OECD just cut our growth forecast to 1% for this year. That's the world equity investors and exporters are living in right now. Here's why our investors aren't losing sleep
Tariffs don't apply to lease renewals. Trade wars don't cancel rent cheques.
But here's the thing about apartment buildings: they don't export anything. Tenants don't pay rent in U.S. dollars. And nobody's slapping a tariff on a lease renewal. While the trade war grinds down every export-dependent sector in this country, rental income keeps flowing because it's entirely domestic. CMHC's latest numbers show housing starts dropped 15% month-over-month in January, and the six-month trend has declined for the fourth straight month. Every project that stalls is fewer units competing for the same tenants. FCPRET investors will collect their March distribution on the 15th. As always.
Cash-Flowing Apartment Buildings · Southwestern Ontario
Targeted Total Return: ~15%
Distributions: 7% Annualized, Paid Monthly
This isn't a normal trade dispute. U.S. tariffs on Canadian steel are running as high as 50%. Lumber is getting hit on both sides of the border. The carbon tax just jumped to $110 per tonne, up 37.5% from last year, which hits sawmills and construction directly. And Trump has now threatened a 100% tariff on all Canadian goods if Ottawa moves forward with the China trade deal. That's the backdrop every developer in Canada is staring at right now.
The result is predictable. CMHC is projecting new construction activity to decline through 2028. Ontario and B.C. will see the sharpest drops. The six-month housing starts trend has fallen for the fourth consecutive month. Developers can't pencil deals when steel costs 50% more and the policy environment changes every week. So they sit on the sideline. And the supply gap that was already measured in millions of units keeps getting wider.
That's the whole point. FCPRET owns apartment buildings that are already built, fully occupied, and producing domestic rental income. No cross-border exposure. No commodity price risk. No trade policy risk. And for investors looking at equity creation, Wellington Tower is structured with CMHC financing and government grants to weather exactly this kind of volatility, targeting 24% to 27% annualized returns over four years.
Purpose-Built Rentals · Build-to-Core, 4-Year Horizon
CMHC Financing + Government Grants (De-Risked)
Targeted Returns: 24% to 27% Annualized
"I used to check my portfolio every morning. Now I just check my bank account on the 15th. The monthly deposit is there every time. That's it. That's the whole point."
Bank of Canada rate decision is next Wednesday. Markets are expecting a hold at 2.25%. We'll break down what that means for mortgage rates, housing demand, and your portfolio. More in tomorrow's note.
This week's live stream breaks down why the current trade war, rate environment, and global uncertainty are creating a once-in-a-cycle opportunity for Canadian rental housing investors.
The trade war is hitting exporters, manufacturers, and commodity producers hard. But it's also making the case for domestic, essential assets stronger than ever. Two vehicles. One thesis. Monthly income from cash-flowing apartments through FCPRET, or equity creation through ground-up development with Wellington Tower.
The world is repricing risk. The smart money is moving into assets that don't depend on trade deals, commodity prices, or what Washington decides to do next week.
To your success,
PV, Mit & Jeff
P.S. Canada just lost $18.5 billion in trade. The average household is paying $2,000 more per year. And housing construction is slowing when we need it most. If your portfolio is exposed to any of that, it might be time to look at an asset class that doesn't care what happens at the border. Just reply to this email and say "interested" and we'll set everything up for you.
By the Numbers
