The Budget acknowledges the financial squeeze being felt by small business owners and their workers.
November 7, 2025
This week, the Carney government tabled its new budget – the first in this Prime Minister’s term in office, and an important one given the challenges of tariffs, trade, economic slowdown and war. The Budget was framed as an offensive, take-charge document that aimed to re-establish Canada’s position in the world economy:
“Our Canadian Advantage: Despite challenges, Canada remains strong and has what the world wants: Talent…Resources…Market access…Resilience…Rule of law…Investment attractiveness…and Tax competitiveness.”
We believe another major advantage is a substantial small and medium-sized enterprise (SME) base and a strong culture of entrepreneurship – especially amongst newcomers, who are more likely than long-term Canadians to start businesses in Canada.
Budget 2025 acknowledges the financial pressure on small businesses
We believe the government has an opportunity to lean into its strengths – our entrepreneurial spirit, highly capable workers, and market access – to ease the financial pressures forcing smaller businesses to shut down. This would require targeted adjustments on only a few highly effective levers – rent, insurance, SME financing, and incentives for living wages – and it could unlock private sector investments into growth for the 98% of employers left out of the Budget’s major initiatives.
We encourage the Carney government to understand the pressures on our country’s businesses and improve existing SME programs.
The Budget’s focus on large-scale investment targets only half of Canada’s economy
There were no new supports to small businesses facing enormous fixed cost increases. Their continued struggle puts 50% of Canada’s GDP and jobs at risk. We encourage the Carney government to understand the pressures of our country’s smaller businesses to improve eligibility of small business financing programs and provide the pathways they need to achieve stability, productivity and growth.
We propose a Good Jobs Tax Credit to help millions of Canadians achieve financial stability and recirculate wealth to local communities.
The CSBFP would be an easy win
The Canada Small Business Financing Program (CSBFP) is a historically underutilized program designed for SMEs but the government’s own evaluation of the program recognizes its loans are too small for typical business requirements and it is underused. The BWA’s own conversations with business owners reveals the program is too inflexible on its eligibility requirements to accommodate many small businesses (a significant portion of small businesses are under 4 employees and don’t meet the minimum revenue requirement).
Increasing the loan size and expanding eligibility would greatly increase uptake of an already-established program with existing administrative resources dedicated to it (…in the spirit of efficiency…!). Updating the program would cost nothing and improve capital access for SMEs, while providing greater revenue to the government in interest charges and reducing the per-loan cost of delivering the program.
Overhauling the CSBFP would create greater access to capital for SMEs, a more effective tool for Canada’s smaller businesses versus the Productivity Super-Deduction.
The budget is both ambitious and vague – which could be an opportunity for SMEs
Overall, the budget invests in many of Canada’s strengths, and rightfully so. But it misses out on the 50% of the economy that is driven by small and medium-sized enterprises. But alas!, all is not lost. Why do we think so?
The budget document is heavy on direction, but light on details. We believe this means the budget will act as a mandate for various government ministries, who will be tasked with fleshing out the details. This indicates a window of opportunity, given that civil servants will be thinking through implementation design and listening for ideas. Unfortunately, there is no mandate for SMEs in this budget, making it difficult to insert our membership base into the conversation.
Nonetheless, we believe SMEs need to be part of the conversation, and as such we will be reaching out to Ministers in November to brief them on the importance of the SME economy. The government already acknowledges that SMEs are facing financial pressures – a promising starting point. Our intent will be to help them close the loop on this large and significant sector of Canada’s economy.
A 1% SME productivity boost would add $14 billion to Canada’s GDP.
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