Three major Canadian banks expressed cautiously optimistic views on the economy on Thursday, in stark contrast to the anxiety and frustration felt by many smaller businesses dealing with the impacts of a full-fledged trade war with the United States. Royal Bank of Canada, Toronto-Dominion Bank, and CIBC unveiled their financial results before the opening bell on the Toronto Stock Exchange. Collectively, these banking giants hold assets totaling up to $6 trillion on their balance sheets. With extensive portfolios that include mortgages, auto loans, and various debt products, along with client bases across Canada and the U.S., these financial powerhouses have a unique perspective on monitoring the effects of tariffs.
RBC CEO Dave McKay, speaking during the bank’s quarterly conference call, highlighted the resilience of the Canadian economy. He pointed out the improvements in employment and GDP in the second quarter, maintaining a cautiously optimistic outlook for continued economic expansion. McKay noted that despite ongoing trade uncertainties between Canada and the U.S., the average effective tariff rate remains relatively low at around six percent, with more than 80 percent of exports remaining duty-free.
TD Bank’s CEO Raymond Chun mentioned an emerging “super cycle” for investment in Canada, driven by government spending on infrastructure and national defense. According to TD Economics, there are over $1 trillion in approved or proposed projects by Ottawa and the provinces through 2035 and beyond. Chun emphasized that trade tensions have not hindered investment opportunities, with potential for significant activity in the coming decade.
CIBC CEO Harry Culham expressed “measured confidence” for the latter part of 2026. He acknowledged the evolving trade landscape and emphasized the bank’s focus on monitoring Canada’s labor market for any signs of weakness. An Oxford Economics study for the Canadian American Business Council warned that over 100,000 Canadian jobs could be at risk if the Canada-U.S.-Mexico Agreement (CUSMA) was terminated. BMO Capital Markets projected that the latest round of U.S. tariffs could shave approximately half a percentage point off Canadian growth, primarily through weakened business confidence and investment.
National Bank’s CEO Laurent Ferreira commended Canada’s economic resilience over the past 18 months and praised government initiatives to support workers and businesses impacted by U.S. tariffs. He highlighted key sectors like energy and power infrastructure, as well as the recent icebreaker ship contract announcement in Quebec. Ferreira also lauded the decision by the Office of the Superintendent of Financial Institutions to reduce the domestic stability buffer, providing banks with more flexibility to lend to struggling businesses.
The CEOs of Bank of Montreal and Scotiabank separately mentioned that they view the Canada-U.S. trade war as manageable. On the Toronto Stock Exchange, shares of major Canadian banks continue to trade near record highs, with the iShares S&P/TSX Capped Energy Index ETF, comprising Canadian bank stocks, registering a remarkable over 46 percent year-to-date surge.