By Ambrose O’Callaghan
Canada’s economy: Taking stock
Statistics Canada recently (May 30, 2025) revealed that Canada’s economy grew by an annualized rate of 2.2% in the first quarter of 2025. This rate was faster than experts expected and was fueled by exports as U.S. companies worked to stockpile ahead of a blitz of tariff increases from the current U.S. administration.
The release of the Q1 growth came ahead of the Bank of Canada’s (BoC’s) decision on Wednesday, June 4, 2025, which saw the BoC keeping the interest rate unchanged.
Despite the stockpiling led export growth for Q1, there were many headwinds that exist in the form of inventory build-up, lower household spending, and weaker domestic demand. Further, the Canadian unemployment rate jumped to its highest level in nine years in the month of May. Despite those headwinds, on June 4, the BoC held its policy rate at 2.75%. The BoC cited trade uncertainty, a relatively solid economy, and unexpectedly firm inflation numbers in its decision to hold on rates.
Canada’s economy is facing challenges, but the country is still home to very strong companies. Many of these businesses operate as oligopolies, which means they generally have very little competition. Investors can rely on these companies to generate consistent earnings.
The Harvest Canadian Equity Income Leaders ETF (HLIF:TSX) is built to deliver with its blend of top Canadian companies and monthly income. It invests in Canada’s dominant companies, with impressive dividend-growth histories, and generates monthly income through an active covered call writing strategy. HLIF offers a straightforward way to tap into Canada’s strongest and most reliable companies, while generating monthly cash flow.
A collection of great Canadian companies
The S&P/TSX 60 has rebounded into early June. That’s good news for those dominant players in the S&P/TSX 60. Earlier this year, we featured HLIF looking at its exposure to some of Canada’s greatest companies. In this piece we will take a closer look at some of the holdings in HLIF that investors are exposed to. But first, it’s worth restating that Canada is home to companies that investors can rely on to generate consistent and predictable earnings. Many of Canada’s top companies operate as oligopolies, meaning they have very little competition.
Take Fortis Inc, which boasts 10 regulated utilities in Canada, the United States, and the Caribbean. These are low-risk, safe, and efficiently run. They have strong governance, regulatory & geographic diversity, and are virtually 100% regulated. The company has provided 4-6% dividend growth guidance through 2029. Fortis has already achieved 51 years of consecutive dividend increase. That makes it one of the only dividend kings – companies with at least 50 straight years of dividend growth – in Canada.
Canadian Utilities Limited is another top utility company that is engaged in electricity, natural gas, renewables, pipelines, and liquids businesses in Canada, Australia, and around the world. This company has delivered a phenomenal 53-year dividend growth streak. That is the longest streak on the TSX.
HLIF holds five of Canada’s well-capitalized Big Six banks: Royal Bank, Toronto-Dominion Bank, Scotiabank, Bank of Montreal, and CIBC. The strength and reach of these strong banks are well known among Canadian families and investors. Each of these names boasts dividend-growth streaks that have spanned 30+ years.
The Harvest Way | Consistent monthly income
HLIF, our featured ETF in this piece, pays monthly cash distributions that’s supported by Harvest ETFs flexible and active covered call strategy. Harvest ETFs has built a reputation for generating consistent monthly income through this active covered call writing strategy throughout its over 15-year history. It is one of the largest investment fund companies engaged in call option strategies in Canada. The investment team is one of the most knowledgeable in option writing and equity investing, possessing many decades of experience.
To date, Harvest has generated nearly $1.5 billion in total monthly cash distributions.
HLIF | An All-Canadian ETF with monthly income
Canadian investors who are looking to invest in Canada and to support Canadian companies can consider the Harvest Canadian Equity Income Leaders ETF (HLIF:TSX). It provides access to Canada’s leading companies. HLIF combines that portfolio with an active covered call option writing strategy, aiming to deliver monthly cash distributions, while capturing potential growth. Given its cash monthly distributions, income-investors should consider tuning into HLIF as well.
HLIF Benefits:
- An equal-weight portfolio of 30 largest diversified Canadian equities
- Companies must meet stringent dividend criteria
- $0.0583 monthly distribution
- Tax efficient income
Annualized Performance
As at May 31, 2025
| Ticker | 1M | 3M | 6M | YTD | 1Y | 2Y | SI |
|---|---|---|---|---|---|---|---|
| HLIF | 3.33 | 4.13 | 2.61 | 6.09 | 17.36 | 13.58 | 6.91 |
Disclaimer
Commissions, management fees and expenses all may be associated with investing in Harvest Exchange Traded Funds (managed by Harvest Portfolios Group Inc.). Please read the relevant prospectus before investing. The indicated rates of return are the historical annual compounded total returns (except for figures of one year or less, which are simple total returns) including changes in unit value and reinvestment of all distributions and do not take into account sales, redemption, distribution or optional charges or income taxes payable by any securityholder that would have reduced returns. The Funds are not guaranteed, their values change frequently, and past performance may not be repeated. Tax investment and all other decisions should be made with guidance from a qualified professional. Any security mentioned herein is for illustration purposes and should not be taken as an invitation to purchase or sell such security. The content of this article is to inform and educate and therefore should not be taken as investment, tax, or financial advice.
