RBC's CEO Dave McKay poses for a photograph at RBC's offices on Queens Quay in Toronto on June 21, 2019. Mr. McKay addressed shareholders on Thursday in the midst of the trade war with the United States.Christopher Katsarov/The Globe and Mail
Royal Bank of Canada RY-T chief executive officer Dave McKay said the U.S. decision to pause some global tariffs is “welcome,” but warned Canada needs to seize an opportunity to boost the country’s economic prosperity no matter how trade tensions play out.
Mr. McKay said tariffs, as advertised, “will suppress growth globally,” speaking to shareholders at the bank’s annual meeting in Toronto on Thursday. That will lead to job losses, hurt affordability for workers and families, and put small businesses at risk, he said.
At the same time, he has heard from business leaders who run large companies that they are struggling to make long-term decisions about how to use their capital, faced with the uncertainty created by constantly changing trade rules.
“When you’re making a five-, 10-, 15-year capital decision, you need certainty of the rules of law, you need certainty of the operating environment, and you need certainty of policy,” Mr. McKay said.
The about-face by U.S. President Donald Trump on Wednesday, pausing some new global tariffs that had only come into force hours earlier, gives business leaders and world leaders alike a reprieve to get their bearings.
“We were obviously happy, as equity markets were,” Mr. McKay said. “There’s a lot of discussion that has to happen with many, many nations and we should do this in a thoughtful and organized manner.”
Whatever the impact on Canada from a period of wrenching change in U.S. policy, Mr. McKay said, “we cannot fall back to where we were as a country.”
He lamented that Canada has “failed to seize” opportunities for years because of tax policy, bureaucracy that slowed approvals for key projects, and at times a “lack of ambition to do some big things.”
“We have to change that,” he said. “We have to seize this moment as a country.”
Mr. McKay’s call to action echoed similar comments from top Canadian business executives, including Bank of Montreal CEO Darryl White, who called the trade crisis “a wake-up call” on the country’s lagging competitiveness.
With a federal election campaign in full swing in Canada, Mr. McKay said voters have a chance to debate “which leadership team is going to help us seize this opportunity for prosperity and inclusivity as a country going forward.”