The Canadian Bankers Association published an analysis by its Head Economist responding to the Competition Bureau’s launch of a study on competition in lending to small and medium-sized enterprises (SMEs) in Canada. The CBA argues that the study’s premise that SMEs are struggling to find competitive financing is inconsistent with available data and that the lending market is already competitive and evolving. Citing Statistics Canada’s Survey on Financing and Growth of SMEs, the CBA notes that obtaining financing ranked 10th among obstacles to SME growth. It highlights a 2024 SME debt financing approval rate of 89% (including 89% for term loans) and states that overall approval rates have remained above 80% for more than 15 years. The CBA also points to survey findings that 81% of SMEs that did not seek external financing did not need it, while 2% avoided applying because they expected to be declined, and reports that banks had authorized close to CAD 298B of SME credit as of 2025 with around CAD 187B drawn, leaving approximately CAD 111B unused. On market structure, it argues that concentration among large banks does not equate to weak competition and points to competition from nearly 200 credit unions and caisses populaires plus ATB Financial, a range of specialized and government-backed lenders, and over 5,500 fintech startups. The CBA’s submission to the Competition Bureau, Capital for Canada, calls for shifting the focus from more competition to regulatory modernization, including easing entry and scaling for small- and medium-sized banks and federal credit unions, applying greater proportionality in prudential requirements, aligning capital rules with lending risk, improving coordination and predictability of regulatory consultations, transitioning the Canada Small Business Financing Program to the Business Development Bank of Canada as proposed in Budget 2025, and enabling Canada Revenue Agency data sharing with consent to speed credit adjudication.
Canadian Bankers Association 2026-03-11
Canadian Bankers Association disputes Competition Bureau’s SME lending competition study citing 89% debt approval and CAD 111B unused credit
The Canadian Bankers Association (CBA) published an analysis challenging the Competition Bureau's study on SME lending competition, citing data suggesting a competitive and evolving market. The CBA highlights high financing approval rates and significant unused credit, arguing that market concentration does not imply weak competition due to diverse financial institutions. The CBA advocates for regulatory modernization to enhance entry and scaling for smaller banks and credit unions, aligning capital rules with lending risk, and improving regulatory processes.