Three major Canadian banks presented cautiously optimistic economic forecasts on Thursday, a stark contrast to the concerns expressed by numerous small businesses dealing with the impacts of a full-scale trade conflict with the United States. Royal Bank of Canada, Toronto-Dominion Bank, and CIBC released their financial results ahead of the Toronto Stock Exchange opening.
These banking behemoths collectively manage assets totaling up to $6 trillion, encompassing extensive mortgage, auto loan, and other debt portfolios for both consumers and businesses. With significant operations in both Canada and the U.S., they have a unique perspective to assess the effects of tariffs.
RBC CEO Dave McKay noted the resilience of the Canadian economy, highlighting improvements in employment and GDP in the second quarter, maintaining a cautious optimism for continued expansion. Despite ongoing trade uncertainties with the U.S., McKay pointed out that the average effective tariff rate remains low at around six percent, with the majority of exports tariff-free.
TD Bank CEO Raymond Chun referred to a potential “super cycle” of investment in Canada driven by government spending on infrastructure and national defense. TD Economics projects over $1 trillion in approved projects by Ottawa and the provinces through 2035, signaling promising investment opportunities in the country.
CIBC CEO Harry Culham expressed measured confidence in the latter half of 2026, emphasizing the evolving trade landscape without speculating on the outcome. CIBC’s chief risk officer, Frank Guse, highlighted the bank’s close monitoring of Canada’s labor market for any signs of weakness.
Analysts predict that the elimination of the Canada-U.S.-Mexico Agreement could result in the loss of more than 100,000 Canadian jobs. BMO Capital Markets forecasts a potential half-percentage point reduction in Canadian growth due to the recent U.S. tariffs, primarily affecting business confidence and investment.
Despite the trade tensions, the CEOs of National Bank, Laurent Ferreira, Bank of Montreal, and Scotiabank have commended Canada’s economic resilience and the government’s proactive measures to support businesses impacted by tariffs. The Toronto Stock Exchange reflects the positive sentiment, with shares of major Canadian banks trading near record highs, signaling investor confidence in the sector.