Canadian entrepreneurs are doubling down on growth despite tough market conditions: BDC

Despite a cross-border trade war and economic uncertainty, Canadian entrepreneurs are focused on growth and expansion, a new survey found.

The Business Development Bank of Canada (BDC) released its annual State of Entrepreneurship report on Thursday, which surveyed 2,500 Canadian business owners and executives on their priorities for the coming year.

“The results of our study show that entrepreneurs are not standing still. Quite the opposite,”
Pierre Cléroux, BDC

The share of small and medium enterprises (SMEs) focused on company growth increased significantly since last year, rising to 78 percent from 67 percent—a notable jump as some businesses have been impacted by trade disruptions and economic uncertainty hampering investment. However, the extent to which these companies want to grow varied widely: 46 percent said they were aiming for “moderate growth” while 22 percent wanted “significant growth.” Meanwhile, only 10 percent said they were going to “radically transform” their business.

Since US President Donald Trump imposed tariffs on Canadian goods in February 2025, Canada’s business and tech sector have faced a number of newfound challenges: the report mentions an economic slowdown, rising costs, more competition, and trade tensions as just a few.

“The results of our study show that entrepreneurs are not standing still. Quite the opposite,” Pierre Cléroux, BDC’s vice-president of research and chief economist, wrote in the report. He added that Canadian SMEs are “actively looking for ways to strengthen their competitiveness,” such as adopting AI and diversifying markets and revenue streams.

The report also indicated that companies under pressure are adapting quickly. Among the small businesses directly impacted by US tariffs—which cover some tech startups that deal with hardware and supply chains—the report found 58 percent expanded their products or services, compared with 39 percent of SMEs generally. Over the past year, 64 percent of SMEs gained new customers in their region, while almost one third found new customers in other parts of Canada.

With rising costs and competition, the vast majority of SMEs put an emphasis on boosting productivity. Eighty-eight percent took at least one step to improve productivity, compared with three-quarters of respondents in 2025.

For some companies, pushing productivity has come through AI adoption—something that BDC itself has encouraged entrepreneurs to do through a federally funded, $500-million loan program to integrate the technology. However, only 22 percent of respondents said adopting or increasing their use of AI was a priority this year (though this metric grew from 14 percent last year). Bigger priorities included expansion (46 percent), improving profitability (40 percent), acquiring new local clients (31 percent), and cutting costs (28 percent).

Feature image courtesy BDC.