Three major Canadian banks presented cautiously optimistic views on the economy on Thursday, in stark contrast to the concerns expressed by numerous small businesses grappling with the impacts of a full-scale trade war with the United States. Royal Bank of Canada, Toronto-Dominion Bank, and CIBC disclosed their financial results before the opening bell on the Toronto Stock Exchange, collectively holding assets valued at up to $6 trillion on their balance sheets. These banking giants, with extensive portfolios covering mortgages, auto loans, and other debt products, have a broad client base spanning Canada and the U.S., offering them a unique perspective to assess the effects of tariffs.
RBC CEO Dave McKay highlighted the resilience of the Canadian economy, citing improvements in employment and GDP in the second quarter as reasons for a cautiously positive outlook on continued economic expansion. He noted that despite ongoing trade uncertainties with the U.S., the average effective tariff rate remains low at around six percent, with the majority of exports remaining duty-free.
TD Bank CEO Raymond Chun referred to a burgeoning “super cycle” of investment in Canada, driven by government spending in key areas such as infrastructure and national defense. TD Economics projects over $1 trillion in approved or planned projects by 2035 from Ottawa and the provinces, signaling robust investment opportunities in the country.
CIBC CEO Harry Culham expressed measured confidence in the latter half of 2026, emphasizing the bank’s readiness to adapt to the evolving trade environment. CIBC’s chief risk officer, Frank Guse, highlighted the bank’s focus on monitoring Canada’s labor market for any signs of weakness.
According to a recent study by Oxford Economics for the Canadian American Business Council, the elimination of the Canada-U.S.-Mexico Agreement (CUSMA) could potentially lead to the loss of more than 100,000 Canadian jobs. BMO Capital Markets forecasts that the latest round of U.S. tariffs could trim Canadian growth by approximately half a percentage point, primarily due to decreased business confidence and investment.
National Bank’s CEO Laurent Ferreira echoed sentiments of economic resilience in Canada over the past 18 months and commended the government’s substantial investment plans and aid measures for businesses affected by U.S. tariffs. He highlighted positive developments in areas such as energy, power infrastructure, and the recent icebreaker ship contract announcement in Quebec, indicating a positive trajectory for the country.
The CEOs of Bank of Montreal and Scotiabank separately described the Canada-U.S. trade war as manageable. The stocks of Canada’s major banks continue to trade near record highs on the Toronto Stock Exchange, with the BMO Equal Weight Banks Index ETF surging nearly 50 percent over the last year.
