It’s been tough to be a US investor in Canadian stocks over the past three years. While the Fed-fueled S&P 500 produced a total return of 56.8 percent over the three-year period through the end of 2013, the S&P/TSX Composite index eked out a gain of 3.4 percent in US dollar terms.

At the same time, the decade-plus during which Canadian stocks handily outperformed the US market has offered a considerable solace. From the beginning of 2000 through the end of 2010, the S&P/TSX Composite Index generated a dividend-reinvested total return of 193.7 percent versus a paltry gain of 4.6 percent for the S&P 500.

But this relatively recent reversal of fortune is unlikely to persist much longer. We write quite a bit about the Canadian economy in this column, and while an improving economy typically flows through to the stock market, the correlation between the two is hardly perfect, which means other factors are at play.

According to data aggregated by Bloomberg, economists have forecast that Canada’s economy will grow by 2.3 percent in 2014, an improvement of six-tenths of a percentage point, versus 2.8 percent for the US economy, an increase of nine-tenths of a percentage point.

Although the US economy clearly has greater momentum, economists with CIBC World Markets say this could be the year in which Canadian stocks finally start outperforming the US market again. However, their hopes hinge upon the global economy delivering an upside surprise, which they believe will happen this year for the first time since 2010.

The International Monetary Fund (IMF) currently predicts the world economy will expand by 3.6 percent in 2014. But if it grows even faster, by 4 percent or more, then that could push Canadian stocks past their US counterparts. CIBC notes that on a historical basis, the TSX has been a big winner in years in which the global economy grew by 4 percent or more, with Canadian stocks beating the US market in each of the past six years in which this was the case.

While four-tenths of a point is a considerable gulf to overcome, it’s not out of the question. In fact, according to The Wall Street Journal, the IMF plans to raise its growth outlook, which could put the 4 percent hurdle within reach.

Aside from past performance, CIBC’s rationale is largely based on the fact that the TSX is tilted far more heavily toward resource-oriented cyclical stocks than the S&P. Although the TSX’s collective weighting of the energy and materials sectors has fallen to 37.3 percent, down about 13.4 percentage points from their peak in 2010, that’s still nearly triple the S&P’s 13.4 percent weighting in these categories.

In the wake of the commodities boom, a sluggish global economy has caused demand for resources to wane, while new production, such as that from the prolific US shale plays, has created a glut of supply. But CIBC reasons that the latter is already priced into commodities, while a sudden increase in global demand for such commodities is not. The economists predict that base metals and lumber could move higher, while natural gas holds steady, and the discount for oil futures narrows.

In terms of the usual metrics for valuations, the Canadian market is hardly offering a screaming value compared to the US. The forward price-to-earnings ratio (P/E) for the TSX is 15.2 versus 15.6 for the S&P. But on a price-to-book basis (P/B), Canadian stocks appear cheaper, with a ratio of 1.96 versus 2.66 for the US market.

From the standpoint of corporate performance, US companies have enjoyed superior earnings growth since the downturn in part because they were emerging from a deeper trough. CIBC believes this catch-up phase has run its course. Beyond that, the more fiscally conservative Canadian firms may be better positioned to endure a rising-rate environment, since their balance sheets are less leveraged than their US peers.

Assuming the global economy does indeed surprise to the upside and Canadian stocks outperform accordingly, there’s still one other performance hurdle, at least from the perspective of US investors, and that’s the declining exchange rate. While a weakening Canadian dollar should be positive overall for the Canadian economy, it erodes investment performance in US dollar terms, as it did in 2013. Fortunately, the average forecast for the Canadian dollar for full-year 2014 is USD0.9175, which is actually slightly higher than where the currency trades presently–near USD0.91.