The S&P/TSX composite index closed down 58.16 points at 14,830.88, while the loonie retreated 0.08 of a U.S. cent to 81.47 cents.
On the commodity markets, the July crude contract closed down 66 cents at US$60.77 a barrel, while the August gold contract fell $6.20 to US$1,180.40 an ounce.
American markets were modestly higher after major gains Wednesday that saw the widely watched Dow Jones industrial average shoot up more than 230 points.
Enthusiasm in New York was helped by a report from the U.S. Commerce Department showing shoppers returned to stores in a big way in May, with retail sales rising a seasonally adjusted 1.2 per cent last month after a 0.2 per cent gain in April.
The Dow added 38.97 points to 18,039.37, while the Nasdaq advanced 5.82 points to 5,082.51 and the S&P 500 gained 3.66 points to 2,108.86.
"I think the main data point for the day globally was basically U.S. consumer sales, retail sales," said Patrick Blais, senior portfolio manager at Manulife Asset Management.
Although many economists pointed to the breadth of uptick in consumer spending, Blais said he felt it was just the fact that the overall gain came in line with expectations.
"I think there has been a lot of confusion in the marketplace where the U.S. economy stood," as a result of the weak start to the year, he said.
Now, with retail sales added to last week's strong employment numbers, it's giving investors confidence. "The assumption that the U.S. economy can continue to gain traction is coming back to the forefront," Blais said.
That has some economists predicting U.S. gross domestic product will come in better than expected in the April-June quarter.
"I think the estimates are sort of in the mid-twos," Blais said.
In Ottawa, the Bank of Canada said in its latest financial system review that the oil slump on its own is unlikely to set off considerable systemic stress and that the probability of a severe recession remains low.
But it warned that the weakness caused by cheaper crude has put the Canadian system more at risk to any event that would lead to widespread job losses and falling incomes. Part of the risk to the system is historically high debt levels in Canada.
Blais said the warning came as no surprise, adding that the central bank wants to see "some normalization when it comes to credit formation, housing prices, borrowing trends."
"I don't think there is any need to panic but I do think the Bank of Canada is using messaging to encourage some normalization within balance sheets as well as asset levels. The last thing they want to do is actually have to use interest rates or other measures to try to contain the risks."