Canada’s next phase of growth to be driven by AI and digital technologies

A $350-billion opportunity: Digital maturity—not just adoption—is now the key challenge, with execution emerging as the primary barrier to growth

Montreal, QC (June 24, 2026) – Canadian small- and medium-sized enterprises (SMEs) could unlock nearly $350 billion in economic growth if more firms reached the digital and AI maturity of the country’s top-performing SMEs, according to a new study from the Business Development Bank of Canada (BDC).

Digital maturity reflects a business’s overall ability to turn technology, data and processes into performance, while AI maturity refers more specifically to how effectively it embeds and scales AI in day-to-day operations.

The estimate models a scenario in which 92% of SMEs reach the digital maturity of today’s top-performing 8%, highlighting the scale of the gap between leaders and the broader market.

The challenge is no longer awareness—it’s execution. Moving from adoption to results now separates leading economies. For Canada, accelerating digital maturity is also a question of sovereignty, tied to the ability to build domestic capability and capture value at scale.

The study found the digitization of Canadian businesses is accelerating, with 96% of SMEs investing in digital technologies in 2025 versus 91% in 2021. However, while adoption is widespread, the report shows that outcomes remain uneven: SME productivity could increase by up to 38% if all businesses reached top-tier levels of digital maturity.

Canada’s GDP could grow by nearly 14%—or $350 billion—over time if all SMEs operated at a mature level. Yet only 30% of SMEs currently use generative AI—even though those that do are 24% more productive.

To measure digital maturity, BDC’s Economic Research team developed a score out of 100 that takes into account the level of technology, corporate culture, data management and intensity of AI use.

“Many of the obstacles to AI adoption aren’t technical—they’re based on myths,” said Jean‑Sébastien Charest, Chief Information Officer at BDC. “That AI is only for big companies, that it’s too complex, or that it can wait. The companies pulling ahead are the ones moving past those assumptions—starting small, integrating AI into their operations, and using it to make faster, better decisions every day.”

“Canada is not behind on adopting technology—but we are behind on extracting its full value,” said Pierre Cléroux, Chief Economist at BDC. “The risk is no longer just slower productivity growth. It’s that the economic value created by AI and data is captured elsewhere. In a world where data and systems underpin every sector, how and where we use these technologies has become a question of economic sovereignty.”

Examples: How SMEs are already translating AI into results

• Foothills Group / ShopView – Used AI-driven systems to streamline operations, transforming a $1M loss into a $2.7M profit in one year
• Maxa – Uses AI to unify fragmented business data, enabling companies to generate real-time insights and improve productivity across operations
• Outreach Genius – AI voice platform that converts missed calls into revenue for home service businesses
• SketchDeck.ai – Platform that automates construction estimating, helping firms scale without adding headcount.

Canada’s productivity gap—and a narrowing window

Canada’s productivity challenge underscores the urgency. The country ranks near the bottom of the G7 in output per hour worked—trailing all but Japan and significantly behind leaders such as the United States and Germany. Closing this gap will require meaningful productivity gains to reach the Organisation for Economic Co-operation and Development (OECD) average.

About the Report

The Digital Transformation & AI Study (SMEs) 2026 is based on a survey of 1,500 Canadian business owners and decision makers conducted in February 2026 using Forum Research’s online panel. Results were weighted by region and firm size. The study also draws on a comparable 2021 BDC survey. As both surveys are based on non-probability samples, results are not statistically projectable, and no margin of error can be assigned. Analysis was conducted by BDC’s Research and Economic Analysis team.

About BDC

BDC focuses on small- and medium-sized business owners, providing them financing, investment, and advice. As Canada’s development bank, we also support entrepreneurs who don’t fit the traditional mold working with a network of partners and help develop underserved markets to unlock economic potential. Our mission is to build strong, resilient businesses that drive Canada’s economic growth. BDC is a perennial Canada’s Top 100 Employer and B Corp certified. For more information, visit www.bdc.ca.

Source: Business Development Bank of Canada (BDC)

Tags: Artificial Intelligence (AI), Business Development Bank of Canada (BDC), Digital Innovation, growth, small business