TORONTO, Sept. 2 — Canada’s biggest banks are brushing off the latest U.S.-Canada trade flare-up as manageable, with third-quarter earnings calls the week of Aug. 24-27 painting a picture of a domestic economy holding up better than feared. The bottom line: executives across the sector say the fundamentals remain solid even after President Donald Trump imposed 50 per cent tariffs on about $28 billion worth of Canadian products over the weekend of Aug. 22-23. Ottawa answered with dollar-for-dollar tariffs on a range of U.S. goods.
The figure that matters most, according to RBC CEO Dave McKay, is the average effective tariff rate: roughly six per cent, with more than 80 per cent of exports still moving duty-free. McKay acknowledged during the bank’s earnings call that Canada and the U.S. have yet to reach a longer-term solution, but the numbers suggest the pain is contained for now.
Scotiabank CEO Scott Thomson went further, calling the flare-up “manageable” on the bank’s Tuesday, Aug. 25 call. He pointed to “pretty good” job growth numbers, fiscal capacity supported by oil prices, and early activity tied to Prime Minister Mark Carney’s agenda. Not everyone is treating the moment as routine.
CIBC said it is planning for a range of outcomes, with chief risk officer Frank Guse noting the trade and geopolitical tensions are having real effects on the economy. Credit performance stayed resilient through the quarter, Guse said, but the bank has built additional reserves for tariff-related risks through expert credit judgment overlays since the start of fiscal 2025.
Investors will note the scale of CIBC’s exposure: its most sensitive business lending tied to tariff impacts represents less than one per cent of the bank’s total loan portfolio. The bank has also run stress tests to prepare for worse scenarios. ## Carney’s agenda wins cautious support Executives expressed some optimism about Carney’s economic program, which targets national-interest projects, major infrastructure, trade diversification and beefed-up defence capabilities.
National Bank CEO Laurent Ferreira told analysts on a Wednesday, Aug. 26 call that business confidence and investment remain difficult in the current context, but he is encouraged by how governments and business leaders are mobilizing around Canada’s economic priorities. CIBC CEO Harry Culham framed the moment as a generational opportunity. Canada’s renewed focus on sovereignty and economic resiliency, he said, is creating one of the most significant capital mobilization efforts the country has seen in decades, with the defence industrial strategy representing a substantial opportunity for commercial clients.
Heading into the quarter, valuations were a concern — bank share prices had risen sharply in 2026 — but analysts appeared to view the results positively. What to watch next: whether the tariff dispute cools or escalates, and whether Carney’s infrastructure and defence push translates into actual lending demand in the quarters ahead.
