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Competition Bureau to Study SME Financing

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  Published in Business and Finance on Monday, January 12th 2026 at 14:24 GMT by Toronto Star

Ottawa, Ontario - January 12th, 2026 - Recognizing the vital role of access to capital in the success of Canadian businesses, the Canadian Competition Bureau has announced a comprehensive study to assess the evolving financing landscape for small and medium-sized enterprises (SMEs). The study, launched today, aims to analyze the influence of traditional financial institutions, burgeoning fintech companies, and other lending entities on SMEs' ability to secure funding, while also identifying potential barriers to competition within the sector.

The announcement comes at a critical juncture for Canadian SMEs. Many are grappling with the pressures of rising interest rates and increased difficulty in obtaining loans and refinancing existing debts. Concerns are mounting regarding future borrowing costs and the overall sustainability of many smaller businesses. The Competition Bureau's intervention signals a proactive approach to ensuring a level playing field and fostering a competitive environment.

"We know access to capital is essential for the success of Canadian businesses, and we want to better understand the current landscape and identify any potential issues impacting competition," stated Rebecca Gowling, the incoming Competition Bureau Commissioner, in a released statement. Her words underscore the Bureau's commitment to examining the complexities of the SME financing ecosystem.

Scope and Focus of the Study

The study's scope is broad, reflecting the multifaceted nature of the SME financing market. Key areas of investigation include:

• Financing Access Methods: The Bureau will meticulously analyze the diverse methods SMEs employ to secure funding. This encompasses traditional bank loans, the growing prevalence of alternative lenders (such as peer-to-peer lending platforms and private equity firms), and the increasing reliance on online financing platforms.
• Role of Digital Platforms: A significant focus will be placed on the impact of digital platforms and their contribution to, or disruption of, the financing process. This includes examining how these platforms utilize data, algorithms, and innovative business models to connect SMEs with potential investors and lenders. The Bureau will assess whether these platforms are fostering genuine competition or inadvertently creating new barriers for some businesses.
• Innovation in the Sector: The Bureau aims to identify and evaluate innovations in the SME financing sector. This could include new lending products, alternative credit scoring models, and blockchain-based financing solutions. A key consideration will be whether these innovations are being deployed equitably and benefiting SMEs across all sectors and regions.
• Impact of Rising Interest Rates: The study acknowledges the current economic climate, explicitly noting the importance of understanding how rising interest rates are affecting SMEs' ability to access and repay financing. This aspect will likely involve analyzing borrowing costs, loan terms, and the potential for predatory lending practices.

Potential for Action

The Canadian Competition Bureau possesses considerable authority to investigate potentially anti-competitive practices and to implement corrective measures. This study's findings could lead to a range of actions, including:

• Recommendations for Policy Changes: The Bureau may recommend adjustments to existing regulations and policies governing the SME financing sector to promote greater competition and access to capital.
• Investigations into Anti-Competitive Practices: If the study reveals evidence of collusive behavior, predatory lending, or other anti-competitive practices, the Bureau has the power to launch formal investigations and pursue legal action.
• Increased Transparency: The Bureau might push for greater transparency in lending practices, requiring lenders to disclose more information about their pricing models and lending criteria.

Timeline and Expectations

The Competition Bureau anticipates that the study will require several months to complete, suggesting a thorough and comprehensive investigation is planned. The resulting report is expected to provide valuable insights into the current state of SME financing in Canada and offer actionable recommendations for policymakers, financial institutions, and SMEs themselves. The Bureau's commitment to this study demonstrates a clear recognition of the crucial role SMEs play in the Canadian economy and a willingness to actively safeguard their access to vital financial resources.