Relationship building, tariffs and regrets: Premier Moe looks back on 2025

Saskatchewan Premier Scott Moe reflected on the key developments of 2025 in an interview with CBC, highlighting relationship‑building efforts, tariff disputes and policy regrets while offering a rare personal anecdote. For investors, the salient point is Moe's emphasis on tariffs and intergovernmental relationships, which could signal continued provincial advocacy or pressure on trade‑sensitive sectors (agriculture, energy, resources), though no new fiscal measures or concrete policy changes were announced.

Analysis

Market structure: Provincial rhetoric around tariffs and trade in Saskatchewan favors local commodity processors and fertilizer/potash producers (Nutrien/NTR) that can capture domestic margins, while pressuring cross‑border logistics (CPKC, CNI) and large exporters dependent on seamless US/Global flows. A provincial tariff shock of 2–5% could shave 1–3% off export revenues for logistics‑intensive firms, translating to ~50–200bps EBITDA tailwind for domestic processors and the inverse for rail/terminal operators over 3–12 months.

Risk assessment: Tail risks include rapid federal intervention, reciprocal interprovincial measures, or a trade escalation that forces rerouting of cargo — low probability but >10% portfolio‑level shock potential for Canadian transport and ag exporters within 0–6 months. Hidden dependencies: rail network chokepoints, seasonal export windows (spring planting/harvest) and USD/CAD moves amplify P&L; catalysts are any tariff regulation published within 30–60 days or provincial budgetary moves.

Trade implications: Tactical plays favor a 2–3% overweight in Canadian fertilizer/potash (NTR) for 3–12 months and a hedged short/put exposure to CPKC/CNI for 1–3 months; consider a NTR vs MOS (Mosaic) pair to capture domestic preference. Option strategies: buy 3‑month 5–10% OTM put spreads on CPKC (cost‑limited hedge) and 3‑6 month covered calls on NTR to monetize elevated implied volatility while holding exposure.

Contrarian: Consensus underestimates the speed of supply‑chain reconfiguration — tariffs could accelerate local capex (mine/processing upgrades) that benefits equipment OEMs (CAT) and miners over 12–36 months, creating a delayed positive for capex suppliers while transport names languish. If federal pushback contains tariffs within 2% or less, transport names should rebound quickly; use that threshold to flip positions.

Key Decisions for Investors

• Establish a 2–3% long position in Nutrien (NTR) for a 3–12 month horizon; target +12–18% upside if provincial measures persist; place a protective stop loss at -8% or exit if federal mitigation reduces tariffs to <2%.
• Initiate a 1–2% short or buy a 3‑month 5–10% OTM put spread on Canadian Pacific Kansas City (CPKC) and/or Canadian National (CNI) to hedge transport exposure; increase hedge size to 3% if a tariff announcement >3% occurs within 30–60 days.
• Execute a pair trade: long NTR (1.5%) and short MOS (1.5%) to capture relative domestic‑preference exposure over 3–9 months; rebalance if NTR outperforms MOS by >10% or if tariff policy is rescinded.
• Take a tactical 1–2% long USD/CAD FX position (or buy 3‑month USD/CAD call options) to hedge CAD weakness risk; unwind if USD/CAD falls >3% from entry or if federal announcements neutralize trade risks.