The Senate Committee on Banking, Commerce and the Economy recently tabled eight recommendations to improve “the backbone of the Canadian economy.”
Canada’s long-term prosperity, productivity, and competitiveness rely on its small and medium-sized enterprises (SMEs), but structural issues are preventing them from reaching their full potential, according to a new study tabled by the Senate Committee on Banking, Commerce and the Economy.
“That the capital exists in Canada to do everything we need to do.”
In November 2025, Senator Daryl Fridhandler moved that the committee examine and report on access to credit and capital markets for SMEs. Just under a year later, after taking in 15 meetings, 24 hours of testimony, and over 35 witnesses, the committee concluded that Canada needs to make many changes to better support those businesses.
The report, titled From Potential to Prosperity: The urgent case for greater investment in Canada’s SMEs, was tabled this week with eight sweeping recommendations meant to improve Canadian SMEs’ ability to access capital and grow in Canada. Each recommendation was loaded with a handful of suggested actions, adding up to dozens of points that ranged from establishing a centralized SME office overseen by a dedicated minister to re-evaluating tax competitiveness with the United States.
To get a better understanding of the committee’s report and recommendations, BetaKit sat down with Fridhandler. The self-described “naive optimist” spoke on how the committee reached its conclusions, the most important recommendations in the report, and whether they’ll be implemented.
The following interview has been edited for clarity and length.
What was the process like to gather evidence, talk to witnesses, and learn about Canada’s SME ecosystem to create this report?
Senate committees, when they’re not reviewing legislation, do special studies. I pitched the Banking, Trade, and Economy Committee to do a study on capital markets for SMEs, which got accepted. Then we worked on framing the terms of reference; we got full Senate approval on authority to go off and do the study, and then we worked up a witness list to scope out the things we believe we need to talk about and hear about.
There were witnesses that either chose not to appear or we couldn’t schedule in, so there are a lot of important people that I might say we didn’t get their views, and hopefully we hear more about it as a committee. I don’t think we will be revisiting this in the near term, but I’m going to continue to pound the pavement on the subject matter of the report, and my goal is to get feedback from people. I will continue to be an advocate for SMEs and improving their situation in Canada.
What findings stood out to you as you were speaking to witnesses?
That the capital exists in Canada to do everything we need to do. I’m not saying that to challenge the Carney foreign investment event that took place in Toronto. That was big picture, but I think as we looked into where the pools of money were and how they were getting utilized, we could conclude that if we do a better job domestically on some of this stuff, we’ve got lots of capital to make things happen for SMEs.
I realized this years ago when I chaired Calgary Economic Development: your bread and butter is addressing the issues for the people here at home, to make sure everything’s good for them, and then you can go elephant hunting. The Prime Minister wasn’t trying to attract more business, necessarily, as opposed to attracting investment, but I really think it’s important to ensure that what you have is supported well, rather than to create anything necessarily new.
Why are SMEs so important to Canada?
They’re the bread and butter. Ninety-plus percent of private sector employment in Canada is in SMEs; in excess of 50 percent of the GDP is generated by SMEs. We want them to be supported, but it’s the scalable stuff; people are having difficulty scaling because they can’t get the capital in this country. They sell themselves out to foreign investors. Foreign investors then move them outside of the country. We lose talent.
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There’s a lot of Canadians in Silicon Valley who would love to have the platform to work here, and it just doesn’t exist because the capital isn’t as available. We’re smaller scale than what happens in Silicon Valley. I might be naively optimistic, but, as I said, the capital exists in Canada; it exists in wealth managed by banks; it exists in pension fund money; it exists in RRSPs and TFSAs that are difficult to deploy into private companies.
What would you say is the most important recommendation in this report?
I’d hate to say all 35, or whatever the absolute number of recommendations are under the eight main headings, but it’s setting up this SME office with a responsible minister. It will give a focus at the federal level. If you had a small business office that could streamline everything and understand the needs of an SME to take it forward and say, ‘well, there’s this program, that program.’ BDC does some of that, and other players do some of that, but I think we can do a better job from a federal government level, and so it’s worth a significant investment to create an SBO just like we have an MPO [major projects office].
What does Canada look like if the committee’s recommendations are implemented?
Multiple BlackBerrys and Nortels remaining in Canada, growing to be global businesses. I’m hoping Cohere doesn’t disappear from Canada; it’s an important national asset. People will look to Canada, and we have to help them scale and stay here. We are the AI champions of the world, but not all the people still live here. But we should do for AI what BlackBerry did for my old little communications thing. We’ve got to get you believing that you’re not losing a lot by staying here. You’ve got lots to gain.
You said you’re an optimistic guy. How confident are you that any of these recommendations will get implemented?
I call myself a naive optimist, but I’m committed to continuing to pound the pavement and to work with the groups that appeared before us, and many others that we couldn’t coordinate with. Part of my public service duty as a senator is to actually do things for the betterment of the country, and that’s part of what I will continue to do. This report isn’t finished because it was issued; it’s a first step on a lot of these issues, and I continue to bang on doors and listen to people and go to conferences and embellish on the ideas that are here, follow up, and get them done.
Feature image courtesy Senate of Canada.