04:29 PM EST, 11/27/2024 (MT Newswires) -- The Toronto Stock Exchange closed at a fresh record high on Wednesday, even amid discussions over the impact of U.S. President-elect Trump threat to impose a 25% blanket tariff on Canada's exports to the United States continue.

The S&P/TSX Composite Index closed up 83.16 points to 25,488.3, topping the prior record of 25,444.28 set on Nov.21. Utilities, up 0.9%, and Health Care, up 0.9%, were the biggest gainers on the day, while Battery Metals, down 2.32%, was the biggest decliner.

West Texas Intermediate (WTI) crude oil closed lower even after a report showed a drop in U.S oil inventories last week while OPEC+ will meet over the weekend to consider its plan to begin returning 2.2-million barrels per day of production cuts to the market. WTI crude oil for January delivery closed down US$0.0.05 to settle at US$68.72 per barrel, while January Brent crude, the global benchmark, closed US$0.02 to US$72.82.

Gold traded higher late afternoon on Wednesday as the dollar and treasury yields weakened amid a flurry of U.S. economic data released ahead of the Thanksgiving holiday, including a key inflation report. Gold for February delivery was last seen up US$16.70 to US$2,663.00 per ounce.

Prime Minister Justin Trudeau is meeting virtually with premiers on Wednesday to find a united response to Trump's threats as economists suss out the effects the imposition of the punishing tariffs. TD Economics proposed steps the federal government could take to shield the economy from a potential disaster.

The bank said the economies of 30 U.S. states are tied to trade with Canada, offering leverage even ahead of Trump's inauguration.

"The silver lining is that Canada has a window to begin negotiations to circumvent this outcome. There's $3.6 billion in goods and services flowing between these countries every day, with 30 U.S. states having a trade interdependency with Canada. While the threat is large, we presume Canada will have some success with advance negotiations, otherwise both countries risk stagnation in a tit-for-tat tariff war of this magnitude," the bank noted.

TD Economics also encouraged the Canadian government to begin advancing policies to support competitiveness of the economy. It said U.S. policies offer "corporate taxes, reduce red tape, and favor domestic manufacturing would further compromise Canada's attractiveness for investment over the longer term".

It fears Canada could face a brain drain to the United States and encouraged the government to make changes to stimulate the economy and raise productivity.

"Meaningful change in taxes, regulatory barriers, and investment incentives should come into scope. It is no longer sufficient to trim around the edges, as the competitive gap has simply become too large with its greatest trading partner. Canada used to have a tax advantage to incentivize investment, but this has eroded. Taxes and regulatory costs have increasingly been cited in small business surveys as a major input cost constraint. And lastly, personal income tax competitiveness is lacking. The most highly educated graduates are financially better off south of the border," the bank noted.