Big Banks Signal Optimism Amid Trade War Struggles
AI-generated image · Bay Street Wire
Executives at Canada's largest financial institutions express confidence in economic resilience while small businesses face mounting pressure from U.S. tariffs.
Canada's largest banks are projecting a positive economic outlook despite an escalating trade war with the United States, a stance that CBC News reports contrasts with the anxiety felt by smaller businesses.
During Q3 financial results calls on Thursday, Royal Bank of Canada (RBC) CEO Dave McKay described the Canadian economy as resilient, citing GDP and employment improvements in Q2. McKay noted that over 80% of exports remain duty-free and the average effective tariff rate is roughly six percent. Similarly, CIBC CEO Harry Culham expressed "measured confidence" regarding the latter half of 2026, while TD Bank CEO Raymond Chun highlighted a potential "super cycle" of investment. Chun pointed to more than $1 trillion in approved or proposed government projects in national defence and infrastructure through 2035.
Other banking leaders echoed this sentiment. National Bank CEO Laurent Ferreira praised government aid for tariff-impacted businesses and the federal commitment to build six icebreaker ships in Quebec. Additionally, the CEOs of Scotiabank and Bank of Montreal described the trade war as manageable on Tuesday.
However, some forecasts suggest deeper instability. BMO Capital Markets predicts U.S. tariffs will reduce Canadian growth by approximately half a percentage point. Furthermore, a study by Oxford Economics for the Canadian American Business Council warned that the elimination of the Canada-U.S.-Mexico Agreement (CUSMA) could result in the loss of over 100,000 Canadian jobs.