Three major Canadian banks presented cautiously optimistic views on the economy on Thursday, in stark contrast to the concerns raised by numerous small businesses affected by the ongoing trade war with the United States. Royal Bank of Canada, Toronto-Dominion Bank, and CIBC unveiled their financial results before the opening of the Toronto Stock Exchange on Thursday. These banking giants collectively hold assets worth up to $6 trillion, with extensive portfolios ranging from mortgages to business loans. With a broad client base across Canada and the U.S., these institutions have a strategic position to monitor the impact of tariffs.
RBC CEO Dave McKay highlighted the resilience of the Canadian economy, citing improvements in employment and GDP during the second quarter as reasons for maintaining a cautious optimism about continued expansion. He noted that despite ongoing trade tensions between Canada and the U.S., the average effective tariff rate remains relatively low at around six percent, with the majority of exports still duty-free.
TD Bank CEO Raymond Chun mentioned a potential “super cycle” of investment in Canada, driven by government spending in infrastructure and national defense sectors. TD Economics reported that there are over $1 trillion in approved or planned projects by both federal and provincial governments through 2035. Chun emphasized that trade tensions have not deterred investment opportunities in Canada, with expectations of significant growth in the coming years.
CIBC CEO Harry Culham expressed a “measured confidence” for the latter half of 2026, acknowledging the evolving trade environment without speculating on its future outcomes. CIBC’s chief risk officer, Frank Guse, emphasized 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 of potential job losses exceeding 100,000 if the Canada-U.S.-Mexico Agreement (CUSMA) were to be eliminated.
BMO Capital Markets forecasted that the latest round of U.S. tariffs could reduce Canadian growth by half a percentage point, primarily through the impact on business confidence and investment. Despite these challenges, the CEOs of National Bank, Bank of Montreal, and Scotiabank have all expressed confidence in the resilience of Canada’s economy and praised government initiatives aimed at mitigating the effects of tariffs on workers and businesses.
Shares of Canada’s major banks on the Toronto Stock Exchange continue to trade near record highs, reflecting investor confidence. The iShares S&P/TSX Capped Energy Index ETF, which includes Canadian bank stocks, has surged by over 46% year-to-date.