Three major Canadian banks expressed cautious optimism about the economy while many small businesses are dealing with the challenges of a trade war with the United States. Royal Bank of Canada, Toronto-Dominion Bank, and CIBC released their financial results ahead of Thursday’s opening bell on the Toronto Stock Exchange. Collectively, these banking giants hold assets totaling up to $6 trillion, giving them a unique perspective to assess the impact of tariffs due to their extensive portfolios and client networks across Canada and the U.S.
RBC’s CEO, Dave McKay, mentioned on the bank’s quarterly conference call that despite ongoing trade tensions with the U.S., the Canadian economy appears resilient. He noted positive trends in employment and GDP in the second quarter, maintaining a cautiously optimistic outlook for continued growth. The average effective tariff rate remains low at around six percent, with the majority of exports still duty-free.
TD Bank’s CEO, Raymond Chun, highlighted an emerging “super cycle” for investment in Canada, driven by government spending in infrastructure and national defense projects. With over $1 trillion in approved projects through 2035, Chun sees significant investment opportunities that could lead to a historic investment surge benefiting the country.
CIBC’s CEO, Harry Culham, expressed measured confidence for the latter half of 2026, emphasizing that the evolving trade environment requires close monitoring. CIBC’s chief risk officer, Frank Guse, is keeping a close watch on Canada’s labor market for any signs of weakness, especially in light of a recent study projecting potential job losses if the Canada-U.S.-Mexico Agreement is eliminated.
Bank of Montreal (BMO) Capital Markets predicts a slight dent in Canadian growth due to the latest round of U.S. tariffs, primarily affecting business confidence and investment. Despite these challenges, Canada’s big banks continue to perform well, with their shares trading near all-time highs on the Toronto Stock Exchange. The BMO Equal Weight Banks Index ETF, comprising Canadian bank stocks, has surged nearly 50% in the last 12 months, reflecting positive investor sentiment towards the banking sector.