Three major Canadian banks presented cautiously optimistic views on the economy, standing in stark contrast to the concerns expressed by numerous small businesses facing the repercussions of an escalating trade war with the United States. Royal Bank of Canada, Toronto-Dominion Bank, and CIBC disclosed their financial results on Thursday ahead of the opening bell on the Toronto Stock Exchange. Collectively, these three banking behemoths hold assets totaling up to $6 trillion on their balance sheets. With extensive portfolios encompassing mortgages, auto loans, and various debt products serving consumers and businesses, as well as client networks spanning both Canada and the U.S., these financial institutions possess a unique perspective to monitor the impact of tariffs.
RBC CEO Dave McKay, speaking during the bank’s quarterly conference call, noted, “The Canadian economy has shown resilience. The improvements in employment and GDP witnessed in Q2 provide a cautiously optimistic outlook for continued expansion.” He added, “Although Canada and the U.S. have yet to reach a long-term resolution, it is worth mentioning that the average effective tariff rate remains relatively low at around six percent, with over 80 percent of exports remaining duty-free.”
TD Bank CEO Raymond Chun highlighted an emerging “super cycle” for investment in Canada, citing government spending in areas such as infrastructure and national defense as key drivers. According to TD Economics, there are over $1 trillion in approved or pending projects by Ottawa and the provinces through 2035 and beyond. Chun emphasized, “Trade tensions have not hindered investment opportunities in Canada, as governments aim to stimulate new economic activities.” He further stated, “The upcoming decade may witness a substantial investment super cycle in Canada, and we are well positioned to benefit from this surge.”
CIBC CEO Harry Culham expressed “measured confidence” regarding the latter part of 2026. He remarked, “The trade landscape will continue to evolve, and we refrain from speculating on its outcomes.” CIBC’s chief risk officer, Frank Guse, highlighted the bank’s scrutiny of Canada’s labor market for any signs of weakness. A recent study by Oxford Economics for the Canadian American Business Council indicated that over 100,000 Canadian jobs could be at risk if the Canada-U.S.-Mexico Agreement (CUSMA) were to be terminated. BMO Capital Markets projected that the latest round of U.S. tariffs could trim approximately half a percentage point off Canadian growth, primarily due to weakened business confidence and investment.
National Bank’s CEO Laurent Ferreira commended Canada’s economic resilience over the past 18 months and lauded the government’s significant investment plans along with the newly introduced aid measures for workers and businesses affected by U.S. tariffs. He specifically mentioned positive developments in energy, power infrastructure, and the recent icebreaker contract announcement in Quebec as indicators of progress. Ferreira also praised the Office of the Superintendent of Financial Institutions for its decision in June to reduce the domestic stability buffer, enabling banks to provide more support to struggling businesses.
Bank of Montreal and Scotiabank CEOs separately characterized the Canada-U.S. trade war as manageable earlier in the week. Despite ongoing trade tensions, shares of Canada’s major banks continue to trade close to record highs on the Toronto Stock Exchange. The BMO Equal Weight Banks Index ETF, comprising Canadian bank stocks, has surged by nearly 50 percent over the past year.