Canada and the United Arab Emirates signed a trade deal last week to boost AI infrastructure cooperation and investment between the two countries.

This “memorandum of understanding” will, according to Federal AI Minister Evan Solomon, ensure that Canada opens up more companies in the UAE while the latter invests in Canadian infrastructure projects.

The deal isn’t binding yet, but Ottawa’s message is clear: if the US and China are racing to build AI capacity, Canada wants to stay in the pack.

— William D.

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BNN Bloomberg: Toronto-based Vimy Pharma plans to make a generic version of Ozempic in Canada once exclusivity ends.

YF: Alberta’s teachers union rejected a government request to end its strike and enter mediation, citing unresolved disputes over class size caps.

The Globe and Mail: Scotiabank $BNS.TSX ( ▲ 0.62% ) has initiated layoffs across Canada as part of its cost-cutting strategy.

IE: Economists expect Canada’s September inflation to rise 2.2% as higher gas prices offset tariff relief ahead of the BoC’s Oct. 29 rate decision.

Reuters: Bank of Canada policymakers will weigh risks more heavily ahead of the Oct. 29 interest rate decision, per Governor Tiff Macklem.

Mainstream media is increasingly waking up to the strength of Canada’s stock market.

Barron’s noted in September that the Toronto Stock Exchange was beating its American counterpart for the year, while The Globe and Mail assessed how the Canadian stock market “became great again.”

And in early October, Vanguard issued a forecast earlier this month predicting that Canadian stocks could outperform US markets for years to come.

Now, Fool’s Amy Legate-Wolfe believes that one particular sector stands out. Saying that Canadian banks “could arguably be the next big thing when it comes to investing,” she points to dividend yields of between 3% and 6% at the time of her writing, paired with attractive valuations.

They’re also well-positioned to capitalize on lower interest rates, Legate-Wolfe argued, as they boost net interest income by lowering borrowing costs. 

Two particular potential winners could be Toronto-Dominion Bank $TD ( ▲ 0.86% ) and Canadian Imperial Bank of Commerce $CM ( ▲ 0.56% ).

The former, which trades at a mere 9.7x earnings while offering a yield of 3.72%, is a strong value and income play, per the financial journalist.

The latter, meanwhile, could be a momentum play. It recently reported rising earnings per share, revenue, and profit. Its dividend of 3.4% looks well-supported, with a payout ratio of just 46%.

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Everyone knows that Amazon $AMZN ( ▲ 1.62% ) has been a major winner since the e-commerce trend became mainstream in the early 2010s. But very few are aware that Packaging Corporation of America $PKG ( ▲ 1.25% ) logged gains of 1,170% over the last 15 years simply by supplying the cardboard boxes that Amazon needed.

Sweeping technological revolutions can create surprising winners alongside the flashy disruptors — and often, there’s no need to overthink things.

Today, one company that’s no one’s idea of an AI stock could be a major beneficiary of the $15.7 trillion trend, as it makes shrewd AI investments to leave its five “Big Six” peers behind.

Fool’s Joey Frenette points to Royal Bank of Canada $RY ( ▲ 0.79% ) as a “hidden beneficiary” of the AI boom.

Pointing to its recent #1 ranking among Canadian stocks in the 2025 Evident AI Index, he predicts that the bank will not lose its AI lead over the other “Big Six” banking stocks anytime soon.

Legate-Wolfe echoed his sentiment. RY just reported record earnings, including strong growth across all segments. She argues its diversified model and immense scale could allow it to harness macroeconomic tailwinds particularly well.

Royal Bank of Canada has raised its dividend by 38% since 2020, thus ramping up payouts at a rate that outpaces the inflation of roughly 25% seen in that time frame.

Yielding 3.0% as we write, it’s also priced as a modest bargain, with a price-to-earnings ratio of 15.5. The company grew earnings at a 20.8% clip last quarter, with a healthy profit margin of 31.7%. 

With these fundamentals, the bank looks well-positioned to continue growing payouts, and could potentially offer a non-tech alternative for investors seeking to profit from the AI boom.

Which Canadian sector do you think will outperform over the next 12 months?

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