Good morning. Canada’s largest banks report third-quarter earnings this week, offering a test of their health and a mirror on the world. That’s in focus today, along with a look at the week ahead – and the retired accountant who found a new phase as a TikTok influencer.
Up first
In the news
Defence: Prime Minister Mark Carney said Canada’s previously announced $2-billion defence package for Ukraine will fund immediate drone manufacturing in both countries, deliver ammunition and armoured vehicles starting next month, and support emergency medical aid, shelter, and cyberdefence.
Trade: A new report urges Canada to pursue “selective engagement” with China to boost trade while steering clear of the U.S.-China rivalry.
Innovation: Hundreds of Canadian companies are making “dual use” products useful for defence, a survey finds.
Retail: How women’s underwear and apparel retailer Knix is expanding into the U.S. and navigating tariffs.
On our radar this week
- Bank of Canada governor Tiff Macklem speaks tomorrow at the Bank of Mexico’s 100th anniversary seminar.
- Air Canada’s 10,000 flight attendants will have 10 days beginning on Wednesday to vote on a tentative agreement reached after a recent three-day strike.
- The United States will end its de minimis exemption on Friday, scrapping duty-free treatment for goods valued at US$800 or less.
- Earnings from Nvidia Corp. on Wednesday will command investor attention. The artificial intelligence giant is a bellwether for tech companies that have spent heavily on AI, yet delivered little beyond variations of chatbots.
- Dollarama Inc. also reports on Wednesday. The retailer beat estimates in its most recent quarter, largely owing to shoppers visiting discount stores more frequently to cut back on expenses.
- Canada’s GDP report on Friday is expected to show the economy stalled in the second quarter, largely because of a steep drop in exports tied to U.S. tariffs, RBC analysts said.
Louise Tailleur in her Ottawa home.Ashley Fraser/The Globe and Mail
Interlude
The TikTok retirement plan: Louise Tailleur never planned to be an influencer, The Globe’s Meera Raman writes, but the retired accountant from Orléans, Ont., has found a second act on social media. There, her kitchen gadget demos and apple pie recipe have drawn more than 160,000 followers across platforms and a growing list of brand deals, including with TikTok itself.
We're keeping a wide field of view. (A reference for binocular enthusiasts.)
In focus
Capital cushions, rising risks
Earnings from Canada’s largest banks this week represent a test of the banks’ resilience and a signal of the economy’s direction. Analysts say Canada’s limited progress in blunting U.S. tariffs risks slowing business investment and weighing on consumer borrowing.
The banks are expected to post modest profit growth, with steadier loan losses, flat lending margins and softer trading revenue replacing the record capital markets gains earlier in 2025.
Here are five themes to watch:
- The short and long views: Scotiabank projects the Big Six will show earnings growth of about 6 per cent from last year. In a report last week, Fitch Ratings reaffirmed its June downgrade of the sector outlook to “deteriorating,” citing tariff risks and weaker business sentiment. Fitch said strong capital levels remain a buffer, but warned loan losses could rise again if trade tensions intensify.
- Provisions for loan losses: The funds set aside for loans that may go unpaid. Analysts expect these reserves to ease after a tariff-driven spike last quarter, though Fitch warns costs could rise if trade tensions deepen.
- Net interest margins (NIMs): The spread between what banks earn on loans and pay on deposits such as savings accounts and GICs. The profit boost from the Bank of Canada’s pandemic-era rate hikes is fading, and margins are expected to stay flat. Fitch flagged TD as an exception, with a potential profit lift from its U.S. retail arm.
- Loan growth: A signal of whether companies are investing and consumers are borrowing. Forecasts point to modest growth of about 3 per cent this year.
- Trading income: Capital markets revenue is expected to cool after record results earlier this year, though still remain stronger than before 2025.
The lineup
Tuesday: Bank of Montreal and Bank of Nova Scotia.
Wednesday: Royal Bank of Canada, National Bank of Canada and EQB Inc.
Thursday: Toronto-Dominion Bank and Canadian Imperial Bank of Commerce.
Friday: Laurentian Bank of Canada.
Charted
Danger in Ontario
Housing starts in Canada hit their highest level since 2022 in July, but Ontario was the exception, stuck in its deepest slump in a decade. RBC says high costs, slow approvals and a glut of unsold condos are choking new projects, warning the province’s pipeline could have “dire consequences for 2026 and beyond.”
Bookmarked
On our reading list
In the air: Air Canada flight attendants scored a big win. Don’t expect the same for other unions.
On the line: Instead of griping about Telus piggybacking on fibre-optic networks, Rita Trichur argues that its rivals should compete.
ICYMI: The Hamilton youth who stole $48-million strikes again.
Morning update
Global markets looked for direction as investors gave a cautious welcome to the likely resumption of U.S. interest rate cuts.
Wall Street futures were in negative territory after Friday’s rally, while TSX futures pointed lower after Canada’s main stock market posted another record close in the previous session.
Overseas, the pan-European STOXX 600 was down 0.17 per cent in morning trading. Germany’s DAX declined 0.18 per cent and France’s CAC 40 fell 0.58 per cent. Markets in Britain are closed.
In Asia, Japan’s Nikkei closed 0.41 per cent higher, while Hong Kong’s Hang Seng jumped 1.94 per cent.
The Canadian dollar traded at 72.30 U.S. cents.