Three major Canadian banks presented cautiously optimistic views on the economy on Thursday, in stark contrast to the anxiety and frustration expressed by numerous small businesses dealing with the repercussions of a full-fledged trade war with the United States.
The Royal Bank of Canada, Toronto-Dominion Bank, and CIBC released their financial results ahead of Thursday’s opening bell on the Toronto Stock Exchange. Together, these three banking behemoths hold assets totaling up to $6 trillion on their balance sheets. With extensive portfolios encompassing mortgages, auto loans, and other debt instruments for both consumers and businesses, along with client networks spanning Canada and the U.S., these financial giants have a unique perspective to monitor the impact of tariffs.
RBC CEO Dave McKay, speaking during the bank’s quarterly conference call on Thursday morning, remarked, “The Canadian economy has demonstrated resilience. The positive trends in employment and GDP in Q2 maintain a cautiously optimistic outlook for continued economic expansion.” He noted that while Canada and the U.S. are yet to reach a long-term resolution, the average effective tariff rate remains low at around six percent, with over 80 percent of exports remaining duty-free.
Referring to an emerging “super cycle” for investment in Canada, TD Bank CEO Raymond Chun highlighted the surge in government spending on infrastructure and national defense as key drivers. According to TD Economics, there are over $1 trillion in approved or proposed projects by Ottawa and the provinces through 2035 and beyond. Chun expressed confidence in the potential for historic investment opportunities across Canada in the coming decade.
CIBC CEO Harry Culham conveyed a sense of cautious optimism about the latter half of 2026, emphasizing that the trade environment is evolving, and they are closely monitoring Canada’s labor market for any signs of weakness. A recent study by Oxford Economics for the Canadian American Business Council suggested that over 100,000 Canadian jobs could be at risk if the Canada-U.S.-Mexico Agreement (CUSMA) were to be eliminated.
BMO Capital Markets projected that the recent U.S. tariffs could trim approximately half a percentage point from Canadian growth, primarily impacting business confidence and investment. Despite the trade challenges, Canada’s major banks remain optimistic, with shares trading near all-time highs on the Toronto Stock Exchange. The BMO Equal Weight Banks Index ETF, a collection of Canadian bank stocks, has surged nearly 50 percent over the past year.
