Question Period Note: Support for Small Businesses

What is the Government of Canada doing to support small and medium-sized businesses?

•Small and medium-sized enterprises make up 99.7% of Canadian businesses and employ 64% of the private sector workforce.
•Many small and medium-sized enterprises are struggling with rising costs and uncertainty in the Canada-United States trade relationship.
•The Government of Canada is using every tool at its disposal to protect Canadian small and medium-sized businesses and help them stay competitive.
•Actions include reducing internal trade barriers, providing relief and support for businesses impacted by the tariffs, and funding programs to help businesses diversify their export markets.

Small and medium-sized enterprises (SMEs) face increasingly interconnected and complicated challenges. These issues are further compounded by economic challenges – most notably, uncertain trade relations with the United States.

Innovation, Science and Economic Development Canada (ISED) delivers a range of initiatives designed to promote entrepreneurship and support small business growth. This includes the suite of entrepreneurship programs, the Canada Small Business Financing Program, the Venture Capital Catalyst Initiative, as well as oversight of the Business Development Bank of Canada.

ISED also supports the growth of innovation ecosystems and networks. The department helps integrate SMEs into global supply chains through the Global Innovation Clusters, connects SMEs with larger companies and research organizations through the Strategic Innovation Fund, and connects SME innovators with federal departments to support technology development, real-world testing, and follow-on procurement through Innovative Solutions Canada.

The department is also focused on leveraging digitalization and artificial intelligence (AI). ISED supports SMEs in accessing cutting-edge AI compute infrastructure through the AI Compute Access Fund and is helping to streamline access to government supports through tools like the Business Benefits Finder and BizPal.

To help Canadian SMEs diversify their markets and stay afloat in the face of U.S. trade disruptions, federal supports include:
•Canada’s regional development agencies (RDAs) new Regional Tariff Response Initiative: $1 billion over 3 years to support small and medium-sized enterprises (SMEs) impacted by tariffs.
•Export Development Canada (EDC) Trade Impact Program: $5 billion investments to help businesses diversify away from U.S. markets.
•Business Development Bank of Canada (BDC) Pivot to Grow: $500 million investment to provide loans to SMEs affected by tariffs.
•Farm Credit Canada (FCC) Trade Disruption Customer Support: $1 billion investment to provide financing for farmers impacted by tariffs.
•Employment Insurance (EI) Work-Sharing Program Enhancements: Extended EI eligibility and duration to reduce layoffs caused by tariffs.

Recent initiatives
Bill C-5, the One Canadian Economy: An Act to enact the Free Trade and Labour Mobility in Canada Act and the Building Canada Act, received Royal Assent on June 26, 2025. This Act will unify Canada’s economy by removing internal trade and labour mobility barriers and fast-tracking approval for major infrastructure projects of national interest.

The government is also modernizing outdated regulations and reducing red tape. A leaner, more focused government will make regulations more efficient, services more effective, and unlock more private capital for Canadian workers and businesses.

•Canada is engaged in ongoing negotiations with the United States (U.S.) and aims to reach a good deal that benefits Canada.

•The Government of Canada will continue to protect Canadian interests and prioritize the needs of the national economy.

•Improving affordability for small businesses and all Canadians is key to Canada’s economic success.

•With the removal of the federal fuel charge and a reduction in middle-class taxes, the government has put money back into the pockets of hard-working Canadians.

•Bill C-5: One Canadian Economy represents an important step in unleashing growth. The government will continue working with Indigenous, provincial and territorial governments to implement Bill C-5 and create a unified economy.

•The Prime Minister also recently announced new measures to help SMEs keep workers on the payroll, adapt their operations and scale with confidence, including the $5 billion Strategic Response Fund; expanded BDC loans of up to $5 million; and the $1 billion Regional Tariff Response Initiative.