After almost seven years, the United States authorities has entered a shutdown after lawmakers failed to achieve a funding deal. Whereas important authorities providers will proceed, non-essential providers will possible be suspended. And traders throughout the globe are bracing for affect.

That goes for traders right here in Canada as nicely, with a number of firms prone to be hit by the shutdown. Nonetheless, whereas some Canadian firms might wrestle on account of cross-border commerce, others could possibly be beneficiaries. So let’s have a look at three Canadian shares that could possibly be affected, whether or not positively or negatively, by a U.S. authorities shutdown.

MG

First, we have now Magna Worldwide (TSX:MG), an auto components producer instantly tied to many U.S. firms. But whereas the corporate depends on many U.S. firms, the auto provide chain publicity might make Magna a possible beneficiary of U.S. onshoring, together with electrical automobile (EV) provide chain help. And it couldn’t come at a greater time.

MG’s current earnings report exhibits that the Canadian firm has proven unimaginable operational enhancements and price self-discipline at a time when gross sales have dropped. At present, the Canadian inventory continues to commerce at a low ahead price-to-earnings ratio, regardless of growing its income and lowering its debt. Moreover, traders can seize a strong 4.1% dividend yield!

For traders in search of development and revenue on this case, with direct publicity to North American auto provide and the potential for upside throughout onshoring, Magna could possibly be a strong place to take throughout this shutdown.

CAE

One other Canadian inventory to observe is CAE (TSX:CAE), which holds many cross-border defence contracts. The Canadian inventory sits on the intersection between civil aviation restoration and robust defence spending. The U.S. and allied defence funds will increase have created a tailwind for the inventory, with aviation coaching persevering with to rise in demand. It’s subsequently a steady Canadian inventory to observe, particularly after earnings.

The primary quarter of 2026 noticed development in income to $1.1 billion, with working revenue rising, leading to a 12.2% revenue margin. It now boasts a $19.5 billion backlog as nicely. The Canadian inventory does commerce at a premium at 31.6 occasions earnings, but web revenue stays strong and margins wholesome, making it a really defensive inventory.

CAE inventory, subsequently, presents a better high quality, larger a number of for publicity to defence and aviation coaching. It’s nice for traders who need recurring income with defence upside. This makes it a strong core holding for long-term traders keen to attend out any potential volatility throughout this shutdown.

CP

Lastly, we have now Canadian Pacific Kansas Metropolis (TSX:CP), which facilitates commerce by leveraging its cross-border rail community to entry the U.S. market. It’s the one North American freight rail that extends from Canada right down to Mexico, benefiting from larger home manufacturing, intermodal development, vitality, and bulk shipments throughout the U.S.

CP once more has proven energy these previous couple of quarters, with very excessive profitability and robust working money circulate. But it trades at an affordable 18.9 occasions earnings, with quarterly earnings rising 36% year-over-year. It’s subsequently a high-quality money generator and a part of a duopoly in Canada amongst rail firms.

This shutdown might probably hurt the corporate within the very quick time period as authorities staff sit on the sidelines. Nonetheless, in the long term this might present worth for traders eager to get in on a strong inventory long run whereas benefiting from dividends and buybacks.

Backside line

Traders might want to regulate this shutdown to eye up whether or not it seems prefer it’s going to final. Nonetheless, keep in mind that that is possible a short-term problem that would present long-term positive aspects. MG, CAE, and CP all profit from cross-border commerce. So getting in throughout a dip is perhaps the best choice to get pleasure from immense development within the years and a long time to come back.