Three major Canadian banks painted a cautiously positive picture of the economy on Thursday, in stark contrast to the anxiety felt by numerous small businesses amid an escalating trade war with the United States. Royal Bank of Canada, Toronto-Dominion Bank, and CIBC unveiled their financial results prior to the opening of the Toronto Stock Exchange. Collectively, these banking behemoths command assets totaling up to $6 trillion on their balance sheets. With extensive holdings in mortgages, auto loans, and various debt products for both consumers and businesses, along with widespread client networks across Canada and the U.S., these financial giants have a privileged viewpoint to assess the impact of tariffs.
“The Canadian economy has demonstrated resilience. The positive trends in employment and GDP observed in Q2 maintain a cautiously optimistic outlook for continued economic expansion,” stated RBC CEO Dave McKay during the bank’s quarterly conference call. He also highlighted that the average effective tariff rate remains low at approximately six percent, with the majority of exports remaining duty-free.
TD Bank CEO Raymond Chun referred to a potential “super cycle” of investments in Canada driven by government expenditures in infrastructure and national defense. TD Economics revealed that the federal and provincial governments have greenlit over $1 trillion in projects planned through 2035 and beyond.
CIBC’s CEO Harry Culham expressed “measured confidence” regarding the latter half of 2026 and refrained from speculating on the evolving trade landscape. CIBC’s chief risk officer, Frank Guse, emphasized close monitoring of Canada’s labor market for any signs of weakness, citing a study by Oxford Economics indicating potential job losses if the Canada-U.S.-Mexico Agreement (CUSMA) were to be scrapped.
BMO Capital Markets projected that the recent U.S. tariffs could trim approximately half a percentage point from Canadian growth, primarily due to diminished business confidence and investment. Despite the trade tensions, shares of Canada’s major banks on the Toronto Stock Exchange remain close to their record highs. The BMO Equal Weight Banks Index ETF, comprising Canadian bank stocks, has surged nearly 50 percent in the past year.
In a separate instance, the CEOs of Bank of Montreal and Scotiabank reassured that the ongoing Canada-U.S. trade conflict was manageable. Laurent Ferreira, CEO of National Bank, commended Canada’s resilient economy over the past 18 months, lauding government investments and aid measures to support workers and businesses affected by U.S. tariffs. Ferreira also praised the decision by the Office of the Superintendent of Financial Institutions to lower the domestic stability buffer, granting banks more flexibility in lending to struggling businesses.
