Three major Canadian banks provided optimistic economic outlooks on Thursday, in contrast to the concerns expressed by numerous small businesses facing the challenges of a trade war with the United States. Royal Bank of Canada, Toronto-Dominion Bank, and CIBC disclosed their financial results prior to the opening of the Toronto Stock Exchange. Collectively, these banking giants hold assets totaling up to $6 trillion on their balance sheets. With extensive portfolios encompassing mortgages, auto loans, and other debt instruments, coupled with client networks across Canada and the U.S., these financial institutions are in a prime position to assess the impact of tariffs.
RBC’s CEO, Dave McKay, stated during the bank’s quarterly conference call that the Canadian economy has exhibited resilience, with positive trends in employment and GDP in the second quarter maintaining a cautiously optimistic outlook for further expansion. Despite ongoing trade negotiations between Canada and the U.S., McKay highlighted that the average effective tariff rate remains relatively low at around six percent, with the majority of exports still duty-free.
TD Bank’s CEO, Raymond Chun, mentioned an emerging “super cycle” for investment in Canada, supported by government spending in sectors like infrastructure and national defense. According to TD Economics, there are over $1 trillion in approved and planned projects by Ottawa and the provinces through 2035 and beyond, indicating robust investment opportunities.
CIBC’s CEO, Harry Culham, expressed measured confidence in the latter half of 2026, emphasizing that the evolving trade environment requires close monitoring. CIBC’s chief risk officer, Frank Guse, highlighted the bank’s vigilance in tracking Canada’s labor market for any signs of weakness.
A recent study conducted 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) was terminated. BMO Capital Markets projected that the latest round of U.S. tariffs could shave approximately half a percentage point off Canadian growth, mainly due to decreased business confidence and investment.
The CEOs of Bank of Montreal and Scotiabank separately stated that they view the Canada-U.S. trade war as manageable. Despite these uncertainties, shares of Canada’s major banks on the Toronto Stock Exchange continue to trade near record highs. The BMO Equal Weight Banks Index ETF, which comprises Canadian bank stocks, has surged nearly 50 percent over the past year.
