Three major Canadian banks expressed cautiously optimistic views on the economy on Thursday, in stark contrast to the anxiety and frustration felt by numerous small businesses dealing with the impact of a trade war with the United States.
Royal Bank of Canada, Toronto-Dominion Bank, and CIBC unveiled their financial results ahead of Thursday’s trading session on the Toronto Stock Exchange. Combined, these banking giants hold assets totaling up to $6 trillion on their balance sheets. With extensive portfolios of loans and a wide client base in Canada and the U.S., these institutions have a unique position to observe the effects of tariffs.
RBC CEO Dave McKay stated during the bank’s quarterly conference call that the Canadian economy has shown resilience, with improvements in employment and GDP in the second quarter reinforcing a cautiously optimistic outlook for continued expansion. McKay also noted that despite ongoing trade tensions with the U.S., the average effective tariff rate remains low at around six percent, with the majority of exports remaining duty-free.
TD Bank CEO Raymond Chun highlighted an emerging “super cycle” of investment in Canada, driven by government spending on infrastructure and national defense. According to TD Economics, over $1 trillion in projects have been approved or are in the pipeline through 2035 and beyond, signaling significant investment opportunities.
CIBC CEO Harry Culham expressed “measured confidence” for the latter half of 2026, emphasizing the bank’s cautious approach amid evolving trade dynamics. CIBC’s chief risk officer, Frank Guse, mentioned the bank’s close monitoring of Canada’s labor market for any signs of weakness.
A recent study by Oxford Economics 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 trim approximately half a percentage point from Canadian growth, mainly due to reduced business confidence and investment.
National Bank’s CEO Laurent Ferreira praised Canada’s economy for its resilience and commended government initiatives supporting workers and businesses impacted by tariffs. Ferreira highlighted the country’s positive direction, citing investments in energy, power infrastructure, and the recent icebreaker ship contract in Quebec.
The CEOs of Bank of Montreal and Scotiabank separately stated that they view the Canada-U.S. trade war as manageable. Despite the trade challenges, shares of Canada’s major banks on the Toronto Stock Exchange remain near record highs, with the BMO Equal Weight Banks Index ETF climbing nearly 50% over the past year.