TORONTO – National security and rising inequality are two of the biggest risks today, said Canadian bank leaders at a conference Tuesday.
“Economic war is how I would basically summarize what’s going on in the world right now,” said National Bank chief executive Laurent Ferreira at the RBC CEO Conference in Toronto.
“Geopolitics are at our doorstep. National security is, I think, one of the most important priorities of our country.”
He said the uncertainty is leading to hesitation on investment and a more fragile labour market and consumer sentiment. While he’s encouraged by the direction Ottawa is taking, he said everything needs to move faster.
“If we want to be part of the new world order, we need to speed this up.”
Ferreira came closest of the four CEOs who spoke in the morning to refer to the extraordinary actions of the U.S. in capturing the president of Venezuela early Saturday. He said “the events this weekend” should play into decision making as Canada focuses on nation building, reindustrialization and defence.
The new tone in Canadian government and the focus on getting projects done is welcome, said RBC chief executive Dave McKay.
“Given the geopolitical world that we live in, the impetus, particularly for Canada to get these things done, is really, really strong.”
He cautioned that rising inequality is a key underlying cause of some of the political shifts going on, as the top 20 per cent of earners break further away from the majority.
“That growing differentiation and disparity is really driving the political agenda in both countries,” said McKay.
“That disparity is much greater in the United States and much more severe and is a huge political issue, and will become an increasing political issue.”
For now, consumers are able to make debt payments and are still spending, but part of that is because Canadians have pulled back on buying homes, he said.
Money that Canadians would otherwise be devoting to debt servicing on real estate is instead going to goods and services, said McKay.
He said low activity in condo pre-sales and construction does weigh on the economy, but that higher spending elsewhere has helped create jobs and stabilize employment in the country.
The trend, along with a stabilization of tariffs, has helped the economy do better than many had expected.
“Economies are a lot more resilient today than I would have expected myself three months ago,” said BMO chief executive Darryl White.
He said while many clients are adapting well to the trade environment, the bank is advising clients not to rely on a quick resolution as a formal review of the Canada-United States-Mexico Agreement approaches mid-year.
“To think that we’re going to all of a sudden wake up to a new deal in June or July, I think, is a bad assumption.”
Besides macro trends, Canadian banks are also pushing keenly into the cost reduction potential of artificial intelligence as a way to boost the key return-on-equity measure.
CIBC chief executive Harry Culham, who took on the role Nov. 1, said the bank has been investing close to 20 per cent of its expense base in technology, including AI systems that should lead to higher revenues and ROE in the future.
“We can do things more efficiently. So new technologies are going to help, and the way we embrace these technologies will help,” said Culham.
“Rather than hiring, call it three or four our five per cent incremental (full-time equivalent) per year; perhaps we don’t need to do that anymore.”
TD Bank Group CEO Raymond Chun said the bank is leaning into AI as well as generally modernizing and automating systems.
He pointed to mortgage management where costs for adjudication, funding and discharge are already down over 20 per cent.
“In the next two quarters you’re going to see agentic AI layered into each one of those buckets,” said Chun.
“The discharge component, as you layer agentic AI, and you actually make the entire process where you don’t involve people, we’re going from the $19 that we’re at today, and we can take out another 50 per cent.”
He said the bank is also pushing to have more clients do routine banking like cheque deposits through mobile devices rather than in branch, and similarly shift some of the more than two million calls a month it receives to its app.
But he said the bank is also going through a hiring push as it looks to add wealth advisers, business bankers and mortgage and investment specialists across operations.
McKay at RBC, which has been named a top three bank globally for AI, said there’s still lots of opportunity to use AI ahead.
“I’m really excited, and AI is just another wave of opportunity to create shareholder value, and client value, at the end of the day.”
This report by The Canadian Press was first published Jan. 6, 2026.
Companies in this story: (TSX:RY; TSX:NA; TSX:BMO)
