Should Canada's Big Banks Face More Competition for Small Business Loans?

Official title: Market Study: Competition in financing for Canada’s small and medium businesses

Closed Policy & Studies Economy & Jobs Finance & Consumer
The Competition Bureau wanted to know if Canada's banking sector is competitive enough for small and medium businesses seeking loans. Right now, the big banks dominate SME lending, and Canadian small businesses pay higher interest rates than their counterparts in other developed countries. This consultation gathered input on what barriers exist and how to improve competition.

Why This Matters

Own a small business? You're probably paying more for loans than business owners in other countries. Only 1 in 10 business owners actually switch banks, even when they want to. This study could lead to changes that make it easier to get better loan terms.

What Could Change

The Bureau could recommend policy changes to reduce barriers for new lenders entering the market. Rules around switching banks could be simplified. Government programs supporting SME financing might be reformed based on the findings.

Key Issues

  • Are Canada's big banks competing vigorously enough for small business loans?
  • What barriers prevent new lenders from entering or expanding in the SME financing market?
  • Why is it so hard for small businesses to switch banks, and what can be done about it?

How to Participate

  1. This consultation closed on October 3, 2025. The Competition Bureau gathered feedback on competition in SME financing through email submissions to smemarketstudy-etudedemarchepme@cb-bc.gc.ca.

What Happened

The consultation ran from September 4 to October 3, 2025 and is now closed. The Bureau gathered public input on the proposed terms of reference for its market study on SME financing competition.

Key Documents