Three major Canadian banks expressed optimism about the economy on Thursday, in contrast to the concerns voiced by numerous small businesses affected by the escalating trade war with the United States. Royal Bank of Canada, Toronto-Dominion Bank, and CIBC released their financial results ahead of Thursday’s opening on the Toronto Stock Exchange. Combined, these banking giants hold assets totaling up to $6 trillion, providing them with a unique perspective to assess the impact of tariffs given their extensive consumer and business loan portfolios and cross-border clientele.
RBC CEO Dave McKay highlighted the Canadian economy’s resilience, citing improvements in employment and GDP in Q2. He maintained a cautiously optimistic outlook for continued economic expansion, noting the low average effective tariff rate of approximately six percent, with the majority of exports remaining duty-free.
TD Bank CEO Raymond Chun referred to a burgeoning “super cycle” of investment in Canada, fueled by government spending in infrastructure and national defense. According to TD Economics, over $1 trillion in approved projects through 2035 and beyond could drive new economic activity. Chun emphasized the potential for a historic investment surge across Canada in the coming decade.
CIBC CEO Harry Culham expressed confidence in the latter half of 2026, while also acknowledging the evolving trade environment. CIBC’s chief risk officer, Frank Guse, emphasized the bank’s close monitoring of Canada’s labor market for any signs of weakness. A study by Oxford Economics for the Canadian American Business Council suggested that more than 100,000 Canadian jobs could be at risk if the Canada-U.S.-Mexico Agreement (CUSMA) were to be eliminated.
BMO Capital Markets projected a slight reduction in Canadian growth due to the latest round of U.S. tariffs, primarily affecting business confidence and investment. The CEOs of Bank of Montreal and Scotiabank separately characterized the Canada-U.S. trade war as manageable earlier this week.
Despite economic uncertainties, shares of Canada’s major banks on the Toronto Stock Exchange have remained near record highs. The BMO Equal Weight Banks Index ETF, comprising Canadian bank stocks, has surged nearly 50% over the past year.
