The Senate Banking Committee started a new study this week on access to credit and capital markets for small- and medium-sized enterprises.  The Senator Tony Loffreda writes about it in his latest column, urging Canada to seize the opportunity before us to empower SMEs to invest, scale and compete.

OTTAWA – The end of the year is always a time for reflection — a moment to take stock of our successes, our setbacks, and the work ahead. This year, that reflection carries added weight as we assess Canada’s position at the twenty-five-year mark of the 21^st century, an era defined by technological acceleration, geopolitical realignment, and economic uncertainty. The stability we once assumed is no longer guaranteed, and the global economic order is shifting beneath our feet. 

Earlier this month, when the Carney Government tabled its first budget, the finance minister laid out a plan to harness Canada’s strengths and meet this moment head-on. And Canada is having a moment. As we look toward 2026, the question is whether we will seize the opportunities before us or watch them pass by.

As Minister Champagne noted, the systems that long underpinned our prosperity – stable global trade alliances, predictable supply chains, a cooperative international order, and reliable partnerships – are being redrawn and constantly challenged.

This generational shift is challenging our assumptions and demanding new approaches. What worked for the last 25 years may not carry us through the next 25. This is especially true for small and medium-sized enterprises (SMEs), which continue to face structural barriers in accessing capital.

Too many Canadian businesses confront complex application processes, slow approval timelines, high collateral requirements, uneven risk tolerance across lenders, and limited financing options for firms trying to scale. These obstacles have real consequences. Promising companies often stall not because of a lack of talent or ambition, but because they cannot secure the right capital at the right moment.

The challenge is even greater for first-generation entrepreneurs, immigrant founders, women-led firms, and SMEs in technology and innovation sectors — the sectors that will define Canada’s future competitiveness.

This is more than a financing problem: it is an economic risk. SMEs are the heartbeat of our economy. They make up 99.7% of Canadian businesses and employed 6.3 million people in 2022. They generate nearly half of all private-sector GDP and account for more than 40% of Canada’s goods exports. Yet our SMEs remain heavily reliant on one market — the United States — with small and medium firms sending more than three-quarters of their exports south. That level of dependence is not sustainable in a world where supply chains are fragmenting, and trade relationships are changing.

Canada has one of the world’s most extensive trade networks, with 16 free trade agreements covering 52 countries and reaching 1.6 billion consumers. But those agreements mean little if SMEs cannot access the financing they need to grow, innovate, and export. Capital is the fuel of expansion — and without it, Canada leaves enormous economic potential untapped.

Budget 2025 includes important steps forward, notably the $1 billion BDC-led Venture and Growth Capital Catalyst Initiative and $750 million to address early-stage funding gaps. These initiatives recognize that government has a role in accelerating private investment and supporting firms at critical growth stages.

But more is required. We need a financing ecosystem that rewards innovation, not just scale; a regulatory environment that encourages risk-taking; and support programs designed with the realities of entrepreneurs in mind. Other countries are modernizing their capital markets to ensure their SMEs can compete globally. Canada cannot afford to fall behind.

This is why the Senate Committee on Banking, Commerce and the Economy has been given a mandate to examine access to credit and capital markets for SMEs. Our study, which we began this week and hope to conclude before the summer, will gather expert testimony and propose practical, actionable recommendations. Senate committees exist not just to identify problems, but to find solutions — creative, scalable, and rooted in the realities facing Canadians across the country.

As we look ahead to the next quarter-century, one principle should guide us: Canada’s prosperity depends on the success of its entrepreneurs. If we want SMEs to invest, scale, and compete on the world stage, we must ensure they have access to the capital needed to grow. Doing so is not simply an economic strategy — it is a nation-building project.

Canada has the talent, the resources, and the global connections to lead in the decades ahead. What we need now is the resolve to put the right conditions in place. Our SMEs are ready. It is time for us to meet them with ambition of our own.

The Honourable Tony Loffreda

Independent Canadian Senator (Québec)