BMO CEO says Canadian businesses facing more uncertainty than U.S. counterparts
The Bank of Montreal’s high reliance on business in the United States allowed chief executive Darryl White to get a good whiff of the uncertain economic environment south of the border about a year ago prior to the election and cuts in interest rates.
A year on, that sense of uncertainty seems to be on the decline in the U.S. and has moved over to Canada after Prime Minister Justin Trudeau announced his resignation this week and Donald Trump renewed his tariff threat.
“When I talk to our clients in the U.S. right now, they say, ‘Look, in a world where I make decisions on capital deployment, expanding my capital plan … there’s a lot less uncertainty in the United States today than there was a year ago,’” he said at RBC Capital Markets’ Canadian Bank CEO Conference on Tuesday.
But in Canada, with a potential election just a few months away and uncertainty about further interest rate cuts, “you have got a client base who says, ‘Boy, that’s a heck of a lot of uncertainty’ because I don’t know what the policy outlook is going to be on the planning horizon,” White said.
“What do people do when they’re uncertain? They wait,” he said. “That waiting that was occurring in the U.S. a year ago; I’m starting to see some release. And that waiting that is a natural consequence of uncertainty is starting to set in a little bit in Canada.”
Trudeau on Monday said he will step down once a new leader of the Liberal Party is selected, ending months of speculation and making a spring election more likely.
The announcement ushered “in a new wave of uncertainty for the Canadian economy and financial markets,” Tu Nguyen, an economist at tax consultant RSM Canada, said in a note on Monday.
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