Canada’s major banks presented positive economic outlooks amid a full-blown trade war with the United States, in stark contrast to the concerns voiced by many smaller businesses. Royal Bank of Canada, Toronto-Dominion Bank, and CIBC released their financial results on Thursday, collectively holding assets worth up to $6 trillion. These banking titans, with extensive loan portfolios and client networks in both Canada and the U.S., offer valuable insights into the impact of tariffs.
RBC’s CEO, Dave McKay, expressed cautious optimism about the Canadian economy’s resilience, citing improvements in employment and GDP in the second quarter. He highlighted that the average effective tariff rate remains low at around six percent, with a majority of exports still duty-free. TD Bank’s CEO, Raymond Chun, mentioned an upcoming “super cycle” of investment in Canada driven by government spending on infrastructure and defense projects totaling over $1 trillion through 2035.
CIBC’s CEO, Harry Culham, conveyed measured confidence in the latter half of 2026, acknowledging the evolving trade environment. The bank’s chief risk officer, Frank Guse, emphasized the importance of monitoring the labor market for potential weaknesses. Studies have shown that the elimination of the Canada-U.S.-Mexico Agreement (CUSMA) could lead to the loss of over 100,000 Canadian jobs, with BMO Capital Markets predicting a half percentage point reduction in Canadian growth due to the latest U.S. tariffs impacting business confidence and investment.
National Bank’s CEO, Laurent Ferreira, commended Canada’s economic resilience and government initiatives supporting businesses affected by tariffs. He highlighted positive developments such as energy and infrastructure projects and the government’s decision to lower the domestic stability buffer, allowing banks more flexibility in lending. CEOs of Bank of Montreal and Scotiabank also expressed confidence in managing the Canada-U.S. trade war.
Despite the trade tensions, Canadian big banks’ stocks have remained strong on the Toronto Stock Exchange, with the BMO Equal Weight Banks Index ETF surging nearly 50 percent in the past year. The banking sector continues to navigate uncertainties while maintaining a positive outlook on the economic landscape.