Three major Canadian banks offered cautiously optimistic views on the economy, in stark contrast to the concerns expressed by numerous small businesses grappling with the impact of the ongoing trade war with the United States. Royal Bank of Canada, Toronto-Dominion Bank, and CIBC released their financial results ahead of the Toronto Stock Exchange’s opening bell. Combined, these banking giants hold assets totaling up to $6 trillion. With extensive portfolios covering mortgages, auto loans, and various debt products for consumers and businesses, along with client networks across Canada and the U.S., these banks have a strategic position to assess the effects of tariffs.
RBC’s CEO, Dave McKay, highlighted the resilience of the Canadian economy, noting positive trends in employment and GDP in the second quarter. He expressed a cautious optimism for continued economic expansion, mentioning that the average effective tariff rate remains low, at around six percent, with the majority of exports remaining duty-free.
TD Bank’s CEO, Raymond Chun, referred to a potential “super cycle” of investment in Canada, driven by government spending in infrastructure and national defense. Chun mentioned that over $1 trillion in approved projects are already in progress or planned through 2035, signaling significant investment opportunities.
CIBC’s CEO, Harry Culham, expressed measured confidence for the latter half of 2026 without speculating on the evolving trade environment. The bank’s chief risk officer, Frank Guse, emphasized the importance of closely monitoring Canada’s labor market for any signs of weakness.
According to a study by Oxford Economics for the Canadian American Business Council, over 100,000 Canadian jobs could be at risk if the Canada-U.S.-Mexico Agreement (CUSMA) were eliminated. BMO Capital Markets predicts that the latest round of U.S. tariffs could reduce Canadian growth by approximately half a percentage point, primarily affecting business confidence and investment.
The CEOs of National Bank, Laurent Ferreira, and Bank of Montreal and Scotiabank separately mentioned the resilience of Canada’s economy and praised government initiatives to support businesses affected by the trade war. Despite the challenges, Canadian banks’ stocks on the Toronto Stock Exchange continue to trade near record highs, with the BMO Equal Weight Banks Index ETF surging almost 50 percent in the past year.
