Canada needs a “little less conversation and a little more action” as it looks to remove

interprovincial trade barriers and build new projects to negate the impact of United States tariffs on its economy, says Bank of Montreal ‘s chief executive. “I am worried that the air goes out of this balloon,” Darryl White said at the Toronto Global Forum on Wednesday. “Are we competitive on tone? Are we competitive on tax? I know the answer to that is absolutely not, and that’s not being talked about enough.”

There has been a lot of conversation in recent months about how the tariffs should act as a wake-up call for Canada and compel it to take advantage of its strengths, such as its natural resources sector and be more competitive, but he said that impetus could be in danger of fading away.

White said Canada’s tax rates need to be more competitive for its economy to grow and to attract international investors. There are investors who are keener on Canada due to all the recent talks, but “we are fooling ourselves if we think those people are going to get on the field,” he said.

“I can be all elbows up and patriotic and all the rest of it, but, at the end of the day, capital is not that sophisticated. It’ll flow to the point of least resistance.”

White said removing Canada’s internal trade barriers could “overwhelm almost any negative impact” that Canada could face from the renewal of its trade deal with the U.S., which is almost certain to include some form of tariffs.

The majority of Canada’s goods that are exported to the U.S. are shielded from tariffs due to the Canada-United States-Mexico (

CUSMA ) trade agreement, which is expected to be revisited next year with negotiations between the three countries ongoing.

White said Canada is on the right track when it comes to negotiations with the U.S., but said it’s important to take “action in our own house” and do it quickly.

“It’s very high stakes, but I think we can do it,” he said. White also said that although the Donald Trump administration is steadfast on its “America First” policy, it’s not “America Alone,” and that it wouldn’t be too bad for Canada to be second.

“Canadians don’t like to hear it, but if Canada were second in an America-first world … this notion of advantage in North America starts to become real,” he said. “Despite the headlines, despite the drama, there is a lot of well-intended and probably well-executed work going on to take advantage of those inherent advantages, where we can help each other as two countries.”

BMO beat analysts’ expectations during its latest quarter, as did the rest of Canada’s largest banks.

U.S. banks’ latest quarterly earnings are also topping expectations so far, but White said they are posting big results because they are doing well in the “Wall Street businesses,” such as capital markets, investment banking and wealth management.

“Move from Wall Street to Main Street and it’s not so pretty,” he said. “There’s very slow loan growth, which is a signal that demand is slowing down; they’re starting to see some cracks in the credit quality. You heard a couple of the U.S. banks talk about the credit quality of their credit card book.”

White said the earnings headlines are being driven by averages, so people need to be careful when looking at the results.

“It’s like having your feet in the freezer and your head in the oven; on average, you feel fine, but it’s pretty goddamn uncomfortable,” he said. “We’re getting more and more and more uncomfortable.”

White also said he expects Canada’s unemployment rate, which is currently 7.1 per cent, to be closer to eight per cent before it falls back below seven. He expects the “adjustment period” to take some time.

He also expects the Bank of Canada to continue cutting interest rates, but considers this factor a “minor piece of the puzzle” when it comes to the overall economy.

“It will inspire a little bit more activity in spending, but somebody who has kind of been on the edge of the cliff and is at the point where they are sort of falling over and hanging on by their fingernails, if you give them a 25 basis point on their mortgage, it’s not going to be the difference maker,” he said.

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