Renewed trade tensions between Canada and the U.S. are creating fresh uncertainty for investors. Ongoing tariff disputes have already put pressure on the financial performance of several Canadian companies. The situation has intensified with the latest U.S. tariff measures, including an additional 50% duty on selected Canadian products, further straining trade relations between the two countries.
Although these challenges may dampen earnings for many Canadian businesses, their impact is unlikely to be uniform. Several high-quality Canadian stocks have resilient business models and the financial strength to navigate trade-related disruptions, making them attractive long-term investments.
Against this background, here are three Canadian stocks to buy and hold as the trade war escalates.
CES Energy stock
CES Energy (TSX:CEU) is a compelling stock to buy and hold amid heightened trade tensions. It has maintained strong business momentum, continuing to post healthy growth even as tariffs and trade-related uncertainty weigh on market sentiment.
CES provides specialized chemical solutions to the oil and gas industry, helping customers maximize well performance, improve operating efficiency, and protect essential infrastructure. While tariffs have created some short-term headwinds, CES Energy is well equipped to manage these challenges. Its large U.S. revenue base, vertically integrated operations in both countries, and adaptable supply chain help reduce exposure to trade disruptions.
CES Energy’s strong positions in major energy-producing regions, increasing chemical intensity in drilling and production, new customer wins, market share gains, and strategic acquisitions continue to support revenue and earnings growth. In addition, CES’s asset-light business model supports strong free cash flow generation, enabling the company to invest in growth initiatives while returning capital to shareholders through dividend increases and share repurchases.
Looking ahead, CES Energy will continue to benefit from rising upstream activity, increased service intensity, and higher adoption of advanced chemical solutions. Moreover, its disciplined capital allocation and integrated business model positions it well to capitalize on the growing demand for advanced chemicals to optimize production.
Extendicare
Extendicare (TSX:EXE) is another top Canadian stock to buy and hold amid tariff-related challenges. The health care provider provides health care and housing services for seniors. It runs long-term care (LTC) homes and offers home health care services.
Despite the political and economic uncertainty, Extendicare’s long-term outlook is supported by Canada’s aging population, which is driving steady demand for both LTC and home-based care. High occupancy rates in its LTC homes, predictable provincial funding, and annual reimbursement increases help generate stable cash flows and protect margins from inflation.
Meanwhile, home health care continues to experience strong volume growth, driven by an aging population, constrained LTC capacity, hospital system pressures, and the growing preference for aging at home.
Extendicare’s acquisition of CBI Home Health has expanded its geographical presence, strengthening its position as a leading home care provider. With resilient demand, stable earnings, and favourable demographic trends, Extendicare is well-positioned to deliver sustainable long-term growth.
Hydro One
Hydro One (TSX:H) is a compelling stock offering growth, income, and stability amid trade tensions. As a pure-play electricity transmission and distribution utility with no power generation operations, the company benefits from a low-risk business model. Approximately 99% of its revenue is generated through regulated operations under a five-year regulatory framework, providing highly predictable cash flows.
Thanks to its defensive business model and predictable cash flow, Hydro One consistently rewarded shareholders with higher dividend payments. Since 2016, the company has raised its dividend at a mid- to high-single-digit compound annual growth rate. Looking ahead, management expects its rate base to expand by roughly 6% annually through 2027, supporting higher dividend payments.
Looking ahead, its regulated operations, rising electricity demand, solid balance sheet, internally funded capital investment program, and grid modernization initiatives position it well to deliver steady growth. This will support its share price and dividend payouts.
