Study: 72% of Canadian Small Businesses Feel Abandoned by Government, New Report Finds

While 55% of small businesses became more resilient in 2025, 87% cut their salaries or delayed life plans to stay afloat, the 2025 Canadian Small Business Resilience Report reveals.

VANCOUVER, British Columbia--(BUSINESS WIRE)--Canadian entrepreneurs are entering Small Business Month facing one of the toughest economic years in recent memory. Small businesses are contending with rising costs, weaker consumer demand, and ongoing tariff pressures, yet continue to fight for growth and survival. Despite their resilience, most owners say they’ve been left largely on their own.

The 2025 Canadian Small Business Resilience Report by Merchant Growth, Canada’s online financing and growth solution for small businesses, draws on responses from more than 1,500 Canadians in an Angus Reid consumer survey and 131 small businesses from Merchant Growth’s customer survey. The findings reveal how consumers are supporting small businesses, what is holding them back, and the stark trade-offs entrepreneurs are making to keep their doors open.

Merchant Growth’s Angus Reid poll found that more than half of Canadians (56%) made a conscious effort to buy more from small Canadian businesses in the past year, often motivated by U.S. tariffs — a factor cited by 56% as a reason to “Buy Canadian.” Yet for entrepreneurs, the impact has been muted. When Merchant Growth polled its customers of small businesses, a majority of entrepreneurs (57%) say the Buy Canadian movement has had no noticeable impact on their business.

Tariffs and trade tensions are pushing Canadians to support more local businesses, but systemic challenges are eroding owners’ ability to thrive. Nearly three-quarters (72%) of small businesses that Merchant Growth surveyed say the government is not providing enough support, and that they have been largely left on their own. To stay afloat, the majority (87%) of small businesses have been forced to make personal sacrifices such as reducing their own salaries, delaying life plans, or selling assets.

“Small businesses are the backbone of the Canadian economy. They’re fighting through inflation, tariffs, and slower spending, all while making personal sacrifices most people never see. We need to stop treating them as if they’re on their own, because their resilience is what keeps our communities and economy moving forward,” said David Gens, Founder and CEO of Merchant Growth.

Canadians want to support small businesses, but barriers persist
More than half (56%) of Canadians said they bought more from local businesses in the past 12 months than in previous years, as revealed in the Angus Reid survey. The top reasons for supporting local included strengthening the economy (76%), protecting Canadian jobs (66%), and reacting to U.S. tariffs (56%).

However, costs remain the biggest barrier. More than half of Canadians (56%) said prices prevent them from buying from local businesses more often. Other top barriers included product availability (35%) and a lack of store locations (26%).

Inflation and weak demand weigh heavily on entrepreneurs
Small business owners cited inflation and rising input costs as the number-one challenge this year, according to Merchant Growth’s customer survey, with 74% saying it hurt their operations in 2025. Half (50%) also pointed to weak consumer and industry spending, while 38% named the lack of government support.

Compared to last year, 42% said their overall performance had worsened, with only 29% reporting an improvement.

When it comes to tariffs, the impact from Canada and the U.S. is split evenly: 21% of Canadian businesses said U.S. tariffs had the biggest impact on their operations, while 20% cited Canadian counter-tariffs on imported goods.

Tariffs have also impacted small businesses in the form of:

• Increased costs of goods/supplies (56.5%)
• Lower customer demand (27.5%)
• Lower revenue (23%)
• Supply chain disruptions (21%)
• Cancelled or paused contracts/orders (12%)

Resilience comes at a personal cost
For owners and operators, behind the business decisions are individual sacrifices. An overwhelming 87% of small businesses polled by Merchant Growth said they made personal sacrifices to keep their businesses afloat.

• 69% have reduced or stopped their own salaries
• 55% have delayed major life plans (buying a home, starting or expanding their family, retirement, etc.)
• 24.5% have sold assets (real estate, business lines, etc.)
• 12% have returned to a full-time job, in addition to the business they own/operate.

Despite these strains, more than half (55%) of small businesses said they are more resilient now than before 2025 — proof that entrepreneurs continue to adapt even when conditions are stacked against them.

About Merchant Growth
Merchant Growth is a leading Canadian financial technology company that specializes in small business financing. Founded in 2009, Merchant Growth has since supported Canadian businesses with over $1 billion in growth financing. Using an innovative approach that includes the latest technology, complete transparency and thoughtful customer care, Merchant Growth is committed to helping make business financing convenient, easy to understand, and accessible.

Merchant Growth was recently named one of Canada’s Top Growing Companies by The Globe and Mail’s Report on Business magazine, placing 119th on the list.

To learn more, visit: www.merchantgrowth.com.

Survey Methodology
These findings are from a survey conducted by Merchant Growth from September 3rd to September 5th, 2025, among a representative sample of 1505 online adult Canadians who are members of the Angus Reid Forum. The survey was conducted in English and French. For comparison purposes only, a probability sample of this size would carry a margin of error of +/-2.53 percentage points, 19 times out of 20.

From August 27 to September 12, Merchant Growth also surveyed 131 businesses in Canada that received funding from the company.