Three major Canadian banks presented cautiously optimistic views on the economy on Thursday, in stark contrast to the concerns voiced by numerous small businesses dealing with the impact of an escalating trade conflict with the United States.
Royal Bank of Canada, Toronto-Dominion Bank, and CIBC released their financial results ahead of Thursday’s trading session on the Toronto Stock Exchange. Collectively, these three banking behemoths hold assets totaling up to $6 trillion on their balance sheets. With extensive portfolios that include mortgages, auto loans, and other debt instruments for both consumers and businesses, along with client networks across Canada and the U.S., these financial giants have a unique perspective to monitor the effects of tariffs.
RBC CEO Dave McKay expressed confidence in the Canadian economy’s resilience, citing improvements in employment and GDP in the second quarter. He highlighted a cautiously optimistic outlook for continued economic expansion, emphasizing that the average effective tariff rate remains low, at around six percent, with the majority of exports still duty-free.
TD Bank CEO Raymond Chun referred to a burgeoning “super cycle” of investment in Canada, driven by government spending in areas such as infrastructure and national defense. Chun noted that there are over $1 trillion in approved or pending projects by Ottawa and the provinces through 2035, signaling a significant wave of investment opportunities.
CIBC CEO Harry Culham expressed measured confidence in the latter half of 2026, acknowledging the evolving trade landscape without speculating on its future outcomes. CIBC’s chief risk officer, Frank Guse, highlighted the bank’s close monitoring of 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 over 100,000 Canadian jobs. BMO Capital Markets forecasts that the latest round of U.S. tariffs could shave approximately half a percentage point off Canadian growth, mainly due to diminished business confidence and investment.
Bank of Montreal and Scotiabank’s CEOs separately opined earlier that the Canada-U.S. trade tensions are manageable. The shares of Canada’s major banks on the Toronto Stock Exchange continue to trade near record highs, with the BMO Equal Weight Banks Index ETF surging nearly 50 percent over the past year.