Introduction
Enclosed in this edition of the Portfolio Managers’ Notes, we are pleased to share BMO Private Wealth’s latest global markets commentary, providing an update on equity markets and insights from our strategist. Additionally, we have included a report on Brookfield Renewable Partners, a Model Portfolio, which recently announced strong fourth quarter earnings.
In the Wealth Management section, you will find a summary article on succession planning for business owners and why establishing a robust management succession plan is essential to ensuring business continuity. We also include an article on the “Great Wealth Transfer,” which explores why economic pressures have prompted some families to accelerate financial support for younger generations. In addition, we have included a Personal Tax Calendar that outlines key deadlines, along with tips to help maximize deductions and credits throughout the year. We remind clients that the deadline to make an RRSP contribution for the 2025 tax year is Monday, March 2, 2026. We encourage those who have not yet completed their 2025 contributions to registered plans to do so as soon as funds are available. Similarly, clients who have not yet completed their 2026 contributions to registered plans are encouraged to proceed as soon as funds permit.
We hope that you have been enjoying your winter. We take this opportunity to remind you that we are here to help if you have any questions or would like to review your investment portfolio or your financial plan
Market Research
BMO Nesbitt Burns Global Markets Commentary
January 2026 or 2025 Redux
January’s theme could be “same as it ever was,” the chorus of “Once In A Lifetime,” the platinum hit by the new-wave band Talking Heads. We generally equate January with a fresh start, but instead the major themes from 2025 carried forward. Unfortunately, the dour headlines persisted, but so did the positive results for stocks and bonds supported by a host of positives that underpin the global economy. Capital markets are also continuing to send important feedback that functions as a guardrail to world leaders’ decision-making.
The party was interrupted mid-month and on the last trading day. A fright from the Japanese government bond market, President Donald Trump’s Greenlandic overtures (intensified then modified), and his nomination for the next Federal Reserve chair impacted the markets.
At the end of it all, some themes were shifting (strength for gold and U.S. dollar weakness). But for the month, it was mostly the same as it ever was. Non-North American equity markets led the way – Europe, Japan and emerging markets stocks continued their run. Shares of small- and medium-sized businesses (SMIDs), which came alive in the second half of 2025, continued to rip. Shares of SMIDs are exiting a multi-year walk in the wilderness, where they underperformed and therefore remain undervalued on many metrics compared to their large-company cousins.
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Brookfield Renewable Partners : BEP.UN-TSX Please contact us to obtain a copy of the full report. Q4 - Scaling Up Into 2026 and Beyond; US$36 Target Unchanged Bottom Line:
2025 set several new records for BEP: renewable additions hit ~8GW vs. ~7GW last year (with path to ~10GW by 2027), capital deployment US$1.9B+, asset sales still above target returns, and corporate PPA demand (especially from hyperscaler) is at the highest level BEP has observed historically. Combined with BEP's scale and enhanced liquidity, this all lends support to BEP's 10%+ FFO/sh growth target and its premium valuation (~15.5x EBITDA vs. coverage ~11x). Combined with a ~26% potential total return to unchanged US$36 target, we maintain Outperform rating.
Wealth Management
You need a succession plan for your management team – not just for yourself
For business owners, succession planning is often focused on transition – the next chapter of your life. But there’s another side that’s just as critical: continuity.
No matter how much time and effort you’ve put into building your business and boosting its value, if you don’t invest in a strong leadership team you can trust to keep it running smoothly without you, you risk ending up with something no one wants to buy.
“We all know the stats – 50% of business owners don’t have a succession plan and 70% of transitions fail between generations,” says John Paniccia, Vice-President & Head of Business Advisory and Succession Planning at BMO Private Wealth. “But they don't fail because valuations or tax plans are off. They fail because of the business is over-reliant on the owner and lacks an adequate management team that can run the business in the owner’s absence. That adds risk to the business, therefore depressing values and limiting exit options.” That’s why owners need another type of succession plan, one that focuses on management roles. Without what’s called a management succession plan, the loss of a key executive can cripple a company, affecting revenues, sales, stakeholder relationships, employee engagement and operations. Worse, it can derail your own transition away from the business.
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Early wealth transfer is on the rise Every generation experiences money-related challenges, but with soaring housing prices, mounting student debt and an unforgiving job market, many young Canadians are feeling the strain. The impacts of these financial headwinds could be spilling into family life, with nearly a quarter of Millennials and Gen Z adults saying they can’t afford to have children.
The estimated $1 trillion that’s expected to flow from baby boomers to the next generations via the Great Wealth Transfer will help down the road, but many younger Canadians say they need help now. That’s causing some families to rethink the traditional approach to inheritance. Instead of wealth flowing to the next-youngest generation, some families are passing their money down to the third generation instead.
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2026 Personal Tax Calendar While most Canadians are aware of the April 30 personal income tax filing deadline, there are other important tax deadlines that must be observed over the course of the year – especially if you want to take advantage of certain tax deductions and credits. This calendar summarizes several important dates on the tax calendar and offers some tips to help you with your overall wealth planning. Where a deadline falls on a weekend or a holiday recognized by the Canada Revenue Agency (“CRA”), the deadline is generally extended to the next business day. Read More Contribution Reminder For you RRSP, TFSA and RESP Accounts Maximizing the value of your registered plans by making annual contributions to your Registered Retirement Savings Plan (“RRSP”), Tax-Free Savings Account (“TFSA”), and Registered Education Savings Plan (“RESP”) is an important wealth planning strategy. By making your annual contribution(s) early in the year, you’ll benefit from the tax-sheltered growth all year long.
The RRSP contribution amount for 2025 is the lesser of $32,490 or 18% of your 2024 earned income.
The RRSP contribution amount for 2026 is the lesser of $33,810 or 18% of your 2025 earned income.
TFSA contribution amount for 2026 is $7,000 or cumulative of $109,000 if you have never contributed to a TFSA account.
The CRA attributes the problem to delays in processing TFSA annual information returns due to unexpected system issues, with no clear timeline for resolution.
The RESP is an excellent way to save for post secondary education for your children. A contribution of $2,500 to the RESP leads to a combined 30% in government matching savings grants.
Salutations, Tim, Catherine and Edward |