RBC’s Dave McKay Warns: Trade Talks Pose Major Risks for Canada’s Economy and Banking Sector
RBC CEO Dave McKay Identifies Trade Talks as Biggest Economic and Banking Risk in Coming Quarter
Toronto, September 3, 2025 – Dave McKay leads the Royal Bank of Canada. He points to trade talks as the main risk for Canada’s economy and banks. He spoke at the Scotiabank Financials Summit in Toronto. He noted that RBC had strong quarterly results. However, he warned that the talks over the Canada-United States-Mexico Agreement (CUSMA) add a risk of change. McKay keeps his ideas clear: trade talks now affect banks and growth.
Encouraging Earnings Amid Economic Uncertainty
Canada’s Big Six banks share good earnings. These gains show that Canada might grow again. RBC’s quarterly numbers, ending July 31, show clear stability. McKay said trade talks with the United States will largely shape Canada’s future. He said, “There’s a source of potential volatility going forward.” He meant that the talks over CUSMA might lead to change. Even though he is hopeful, McKay notes a risk. The trade deal once helped shield the economy from U.S. tariffs. Changes in that deal can shift client demand and affect growth.
Economic Contraction and Policy Implications
Canada’s economy shrank by 1.6 percent in the second quarter of 2025. Statistics Canada shows that the drop came from low exports. U.S. tariffs caused a sharper fall than many had predicted. This drop matched the Bank of Canada’s July forecast. We now see more talk of a possible interest rate cut. Desjardins economist Royce Mendes said rates might drop after three meetings held at 2.75 percent.
Continued Uncertainty in Trade Policy
Darryl White leads Bank of Montreal. He shared a view like McKay. He said that trade uncertainty remains. He noted that Canada shows some signs of growth. But he warned that Canada still trails the United States. White said, “There isn’t a full understanding yet of whether we are going to preserve CUSMA.” He sees a good story for business but notes a pause in trade action. He expects Canada’s growth to rise when trade fixes settle.
Financial System Resilience
Peter Routledge heads the Office of the Superintendent of Financial Institutions. He stated that Canada’s financial system stands ready. He said the system will help Canada face global change. His words showed strength in a time of uncertainty.
Looking Ahead
Canada faces hard choices as trade talks and global headwinds press on. The banks and leaders stay alert. They watch economic signs and trade news closely. The future of the CUSMA talks matters a great deal.
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