Performance Trends
As of June 30, 2026.
Key Quarterly Highlights
Apr. 14
AtkinsRéalis Group (TSX:ATRL) signs MOU with South Korean company Hanwha Ocean to explore opportunities to support Canadian submarine capabilities.
May 12
The federal government proposes a 12-month period for all federal reviews and decision-making timelines on major projects.
June 29
APEGA to remove the 1-year Canadian experience requirement effective July 18, allowing international applicants to demonstrate Canadian work environment equivalencies immediately within their applications.
July 1
The US formally declines to extend CUSMA for another 16-year term, opting instead to trigger annual reviews likely to force concessions from Canada and Mexico.
Performance Trends
Whitehorn tracks two indexes. The Whitehorn Engineering Index includes professional engineering consulting firms whereas the Engineering-related Services Index includes companies that specialize in related services including construction, environmental, and project management.
Source: LSEG Workspace. Market data as of June 30, 2026.
Why the USD is Beating the Loonie - Even with Oil Up
If your engineering consulting business sells into the US or you deal with suppliers south of the border, note the following: the higher oil, higher Loonie relationship doesn't necessarily hold anymore. Instead, it's about the gap between Canadian and US interest rates. We dive deeper into the data below:
Past: The Loonie Moved with Oil (2000–2017)
0.9258
Correlation
Jan 2000 – Dec 2017
What does this mean?
Oil up = CAD strong; Oil down = CAD weak
·Historically, the Canadian dollar acted as a prominent commodity currency.
·As crude oil represents a foundational share of our exports to our largest trading partner south of the border, the CAD/USD FX rate was naturally responsive to WTI movements.
·When oil prices rose, a combination of capital inflow to the Canadian energy sector and the demand for Canadian oil would boost CAD demand.
·On the other hand, global oil oversupply or demand collapses, as evident in 2008 and 2014, typically led to a CAD depreciation.
The relationship was less evident from 2018 onwards. From Jan. 2018 to May 2026, we calculated a correlation of 0.1102 between the two variables. It was increasingly evident that there were other driving forces behind the weakening Loonie, especially from 2024 onwards. Our investigations led us to an increasingly prominent factor, the divergence in monetary policies between both countries.
The Split
In the early 2020s, both the Bank of Canada and the Federal Reserve hiked rates in lockstep until 2023. Since Q2 2024, there has been a material divergence in monetary policy between both central banks.
·The Bank of Canada started cutting rates in June 2024, which signaled the beginning of the divergence.
·The Federal Reserve only began cutting rates in Aug. 2024. In addition, the Bank of Canada reduced rates further compared to its U.S. counterpart since then.
·The current spread between the two nations is 1.50 percentage points.
How a Rate Gap Resulted in a Weaker Loonie
The chain of cause and effect is summarized below.
Step 1
🏦
US Bonds Pay More
A 90-day US T-bill yields ~1.5pp more than the Canadian equivalent. Same risk, better return.
Step 2
💰
Capital Chases Yield
Pension funds, banks, and investors worldwide shift money out of CAD assets into higher-paying USD assets.
Step 3
💱
To Buy US Bonds, Sell CAD First
Every shift requires converting CAD to USD. This selling pressure pushes USD/CAD up directly.
Step 4
📉
CAD Weakens — Even If Oil Rises
Rate-driven capital flows are larger and faster than oil-trade flows, so they dominate currency pricing.
0.4682
Correlation
Rate Spread vs. USD/CAD
What does this mean?
Interest rate spread is a better predictor of USD/CAD today than oil prices.
Why Canada Cut Rates Faster than the US
Below, we review three factors behind the divergence:
01
Canadian Economy Cooled Faster
Weaker Canadian GDP and softening labour market as key indicators.
BofC cut rates 9 times between June 2024 and Oct. 2025 for a 275-basis points reduction combined.
02
US Inflation Remained Hotter
Persistent core inflation and tariff-driven price pressure in the U.S. kept the Fed more cautious.
The Fed paused rate cuts for the most of 2025 despite pressure from Trump, while Canadian inflation returned to target earlier in 2024.
03
Tariffs Hit Canada Harder
US imposed tariffs weighed heavily on Canadian exports and business investment given high Canadian exposure to the US market.
The BofC was forced to be more accommodating to absorb the economic shock whereas the Fed had less reason to ease aggressively.
Bottom Line for Engineering, Environmental & Consulting Companies
If your business carries USD costs, debt, or receivables, keep an eye out for the BofC-Fed spread when determining your USD exposure. With a rate hike expected in the US in H2 2026 while the BofC maintains status quo, we anticipate the Loonie to perform weaker than the USD for the remainder of 2026.
Opportunities on the Horizon
For years, the Canadian energy sector has operated under a cloud of "false hope." It has navigated regulatory deadlocks, cancelled projects, and tightening environmental policies. However, we observed several developments during Q2 that appear to be converting plans into commercial reality.
A · Domestic — Midstream & Infrastructure
Heartland NGL Extraction Plant - Pembina Pipeline
$570MM · Target 2029
850MMcf/d straddle plant to extract NGL; FID approved, construction underway.
NGL Fractionation Facility, Fort Saskatchewan - CSV Midstream Solutions
CapEx TBD · Target 2029
35,000 bpd of NGL fractionate capacity; FID expected early 2027.
Alberta Corridor Export (ACE) Rail Terminal - Keyera, AltaGas, CN Rail
$240MM · Mid-2028
Keyera-owned rail terminal in Fort Saskatchewan linked to CN's rail network and AltaGas' west coast export platform.
New West Coast Oil Pipeline
CapEx TBD · 2033
1MM bpd capacity targeted; construction approval targeted by Sep. 2027.
B · LNG Export — Asia & Europe
LNG Canada Phase II Expansion - Shell
$33B · Early 2030s
Shell working toward FID by end of 2026 to double capacity to 28 MTPA for Asian exports.
Kanata LNG - Kanata, Hanwha Ocean
US$15.7B · TBD
Floating LNG export project in Prince Rupert, BC, with 12 MTPA expected capacity; currently non-binding.
Ksi Lisims LNG
$10B · 2028/2029
Floating LNG project on Pearse Island, BC (12 MTPA); 20-year, 1 MTPA supply agreement with Germany's SEFE.
C · International Market Access
Bay du Nord Offshore Project - Equinor, BP
$14B · 2031
500km east of St. John's, NL; FID in 2027, expected to yield 400MM boe.
Bridger Pipeline Expansion - Bridger Pipeline, South Bow
US$2B · TBD
1,038km pipeline moving 550,000 boe/d from the Canada-U.S. border in MT to Guernsey, WY; revives portions of the defunct Keystone XL.
Alberta–South Korea Crude Tariff Waiver
In effect
Waived 3% tariff on crude and bitumen exports to South Korea, aiming to grow exports from $400MM to $1B annually.
Select Merger & Acquisition Transactions
Notable Canadian engineering, environmental & consulting transactions this past quarter.
Date
Acquirer
Target
Description
Apr. 2026
AtkinsRealis Group (TSX:ATRL)
Montreal, QC
Wallbridge Gilbert Aztec
Australia
Acquisition of Australian and New Zealand engineering and project management consultancy firm with 800 personnel to enhance national platform in Australia and to strengthen delivery capacity
Apr. 2026
CIMA+
Montreal, QC
Cshed
Laval, QC
Acquisition of professional services firm specializing in advanced timetable planning and optimization solutions for public transit operators and private transportation providers to strengthen presence in the transportation and sustainable mobility sector.
May 2026
Englobe
Laval, QC
Pluritec
Trois-Rivieres, QC
Acquisition of multidisciplinary engineering consulting firm with 200 personnel to expand market presence and to broaden offerings.
May 2026
Fraser Big Sky Capital (TSXV:FRAS-P)
Vancouver, BC
Progressive Engineering & Consulting
Edmonton, AB
Acquisition of multidisciplinary engineering company offering ECMP services with 50+ staff across Alberta, the Yukon and the Maritimes.
June 2026
GLJ
Calgary, AB
Petrel Robertson Consulting
Calgary, AB
Acquisition of geoscience and engineering consulting firm to strengthen offerings and to expand capacity to support clients.
June 2026
Herzig Engineering
Kansas City, MO
Canada Training Group
Turtleford, SK
Acquisition of electrical safety training and maintenance training provider to enhance North American support and increase Canadian market presence.
Check out more transactions on our website.
-6%
Q2 2026 vs. Q1 2026
-24%
Q2 2026 vs. Q2 2025
Let's talk about
your next move.
Whitehorn Capital provides sale of business, financing and merger & acquisition advisory services to Western Canadian engineering, environmental & consulting companies. To discuss this quarter's findings, reach our team below.
Whitehorn Expert
Ray Chia, CFA
Address
3332 20 St SW Suite 406, Calgary, AB T2T 6S1
All financial data has been sourced from LSEG Workspace. This report is prepared by Whitehorn Capital Inc. for informational purposes only and does not constitute investment, legal, or tax advice. Figures may include forecasts and are subject to change without notice.
Whitehorn Capital Inc.
