Small and medium-sized enterprises (SMEs) power Canada’s economy, but to stay competitive in the face of global trade tensions, supply chain disruptions, and rising economic uncertainty, they need to adapt. One of the most accessible tools to help meet this challenge is innovation through digital transformation.
This report explores how Canadian SMEs are navigating this digital shift, the challenges they face, and the outcomes they are achieving. Drawing data from a survey conducted with 1,683 business owners from April to June 2025, it also examines how emerging technologies, like generative AI, are influencing Canada’s productivity and economic trajectory.
Our analysis shows that firms with higher digital adoption consistently outperform others in terms of productivity, with technology seen as a key driver to efficiency, competitiveness, and increased sales. In fact, digital tools boost productivity by 29% on average, generating $1.60 for every dollar invested. Generative AI alone can save businesses over an hour per day (1.08 hours). Reinvesting half of that time into productive work could deliver a $12.8B annual boost to Canada’s GDP.
The report concludes with guidance for SMEs seeking to accelerate their digital journey and offers policy recommendations to support broader adoption of digital transformation across Canada’s economy.