The Competition Bureau of Canada is preparing a market study into the state of competition in small business financing, amid concerns that entrepreneurs face limited choice and higher borrowing costs than larger firms.
Launched Thursday, the consultation invites Canadians to comment on the proposed scope of the study by October 3. The review will focus primarily on term loans, a key product for businesses investing in growth.
The Bureau cited several challenges for small and medium-sized enterprises (SMEs), which make up over 98% of Canadian employers: dominance of the big banks, barriers facing new lenders, difficulties in comparing loan options, and a persistent gap in borrowing costs compared to larger companies.
“Small and medium-sized businesses are the backbone of the Canadian economy,” said Commissioner of Competition Matthew Boswell. “Increasing competition in Canada’s financing sector would give these businesses better access to the funding they need, support greater productivity, and boost innovation.”
The Bureau stressed that the initiative is not an investigation into wrongdoing but could lead to recommendations for policy reform, and potentially further enforcement action if competition concerns are uncovered.
