The Canadian Bankers Association published a submission to the Competition Bureau’s market study on competition in small and medium-sized enterprise (SME) financing, arguing that SMEs have broad access to debt finance from banks and non-banks, including amortizing term loans. The paper sets out recommendations intended to reduce frictions for SMEs and increase competitive intensity in financial services. The submission highlights rising bank credit supply to SMEs since 2010, with authorized debt increasing from CAD 168.9 billion to CAD 297.8 billion by 2025 and outstanding debt increasing from CAD 103.3 billion to CAD 186.5 billion, alongside consistently high approval rates (88 percent for SME debt finance in 2023 and 89 percent for amortizing term loan applications). It argues that regulatory capital requirements influence the cost and availability of bank lending and points to differences between the Advanced Internal Ratings-Based approach used by domestic systemically important banks and the Standardized Approach used by other banks. Recommendations include reducing burdens for entry and growth of smaller banks and federal credit unions, maintaining proportionality in regulatory requirements for small and mid-sized banks, adjusting capital adequacy treatment to enable more SME lending (including support for OSFI’s proposal to lower the Standardized Approach risk weight for corporate SME exposures to 75 percent from 85 percent), streamlining government guarantee programs (notably reforms to the Canada Small Business Financing Program), and expanding data-sharing policy to include government-held data such as Canada Revenue Agency information with appropriate consent. On next steps referenced in the submission, Budget 2025 proposals to amend federal financial-sector legislation were described as being before Parliament, and OSFI was cited as intending to pilot a fast-track approvals framework in June 2026 focused on credit unions and technologically innovative or emerging banking models. The CBA also indicated it is available to meet with the Competition Bureau to discuss its submission.
Canadian Bankers Association 2026-02-27
Canadian Bankers Association submits Competition Bureau study response recommending easier entry and capital framework changes for SME lending
The Canadian Bankers Association submitted a paper to the Competition Bureau's market study on SME financing, highlighting broad access to debt finance and rising bank credit supply to SMEs. It recommends reducing entry barriers for smaller banks, adjusting capital adequacy treatment, and expanding data-sharing policies. The submission also notes upcoming legislative amendments and OSFI's pilot fast-track approvals framework for innovative banking models.