Canadian Entrepreneurs Prioritize Growth Amidst Economic Uncertainty and Trade Tensions
BDC report reveals SMEs are aggressively pursuing expansion despite rising costs and tariffs.
1Growth Ambitions Surge
The Business Development Bank of Canada report shows 78 percent of SMEs are now focused on growth, rising from 67 percent last year. Despite economic headwinds and trade disruptions, entrepreneurs are actively pursuing expansion. While 46 percent target moderate growth, 22 percent aim for significant expansion, demonstrating a clear shift toward aggressive business scaling.
2Navigating Trade Challenges
Since February 2025, US tariffs on Canadian goods have created significant hurdles for the tech and hardware sectors. Companies directly impacted by these tariffs are adapting faster than their peers, with 58 percent expanding their product or service offerings. This proactive approach highlights a strategic pivot to mitigate the impact of cross-border trade tensions.
3Productivity as a Priority
Eighty-eight percent of SMEs implemented measures to improve productivity this year, a notable increase from 75 percent in 2025. Facing rising operational costs and heightened competition, business leaders are prioritizing efficiency to maintain margins. This focus on internal optimization serves as a primary defense mechanism against the current climate of economic uncertainty and slowdown.
4AI Adoption Trends
While AI adoption remains a focus, only 22 percent of respondents identified it as a top priority, up from 14 percent last year. The federal government supports this transition through a 500-million-dollar loan program. Despite this funding, businesses currently favor traditional expansion and profitability goals over immediate, large-scale integration of advanced artificial intelligence technologies.
5Market Diversification Efforts
Canadian SMEs are actively seeking to strengthen competitiveness by diversifying their revenue streams and customer bases. Over the past year, 64 percent of businesses successfully acquired new local customers, while nearly one-third expanded their reach into other Canadian regions. This geographic diversification helps mitigate risks associated with specific trade disruptions and localized economic slowdowns.
6Strategic Business Objectives
Beyond general growth, 40 percent of entrepreneurs are prioritizing profitability, while 31 percent focus on acquiring new local clients. Additionally, 28 percent are actively cutting costs to navigate the current fiscal environment. These objectives reflect a balanced strategy of pursuing new revenue opportunities while simultaneously tightening operational control to ensure long-term financial sustainability.
7Economic Resilience Mechanisms
Pierre Cléroux, BDC’s chief economist, notes that entrepreneurs are refusing to remain stagnant despite external pressures. By focusing on competitiveness and market expansion, these businesses are countering the negative effects of trade wars. The data suggests that the Canadian SME sector is demonstrating high levels of agility and strategic planning in response to volatility.
8Future Outlook Implications
The shift toward growth indicates that Canadian entrepreneurs view current challenges as manageable hurdles rather than insurmountable barriers. By prioritizing productivity and diversification, firms are positioning themselves for long-term stability. Future success will likely depend on how effectively these businesses balance immediate cost-cutting measures with the necessary investments in technology and market reach.