A new KPMG survey revealed that small and medium-sized businesses (SMBs) in Canada are highly confident in their growth prospects and view generative AI as key to achieving their goals.
The 2024 KPMG Private Enterprise Business Survey found that 92 percent of SMB leaders are optimistic about meeting their expansion targets over the next three years, with most attributing their resilience to lessons learned from recent economic disruptions.
The survey, which polled 735 business owners and executives, shows that embracing digital transformation and automation is a top priority. More than 86 percent of respondents reported increasing their adoption of AI technologies to boost efficiencies and productivity. “Today, leaders see generative AI as the most important strategy for growth,” said Mary Jo Fedy, KPMG private enterprise’s national lead partner. “It’s encouraging to see business leaders committed to tech investment, given Canada’s underinvestment in this area historically.”
A notable 88 percent of respondents indicated they are in a stronger position than last year, and many are planning major investments in technology, machinery, and workforce upskilling to increase productivity. Additionally, 80 percent of SMB leaders expressed interest in partnering with long-term investors to help them navigate growth, with a particular focus on technological advancements.
“SMB leaders are looking for sustainable funding and sound advice to expand their businesses,” explained Johanna Gerrie, national M&A tax leader at KPMG. This interest in patient capital aligns with plans for business transitions, as 61 percent of leaders intend to retire within the next decade.
Despite their optimism, business leaders are cautious about various risks, particularly cybersecurity, which remains their primary concern. They also flagged disruptive technologies, energy security, and environmental issues as key threats.
The survey noted growing frustration with Canada’s current tax policies, as 88 percent of respondents feel that new tax measures, such as capital gains rate hikes, could stifle economic growth. Nearly a third of leaders are contemplating moving investments to jurisdictions with more favourable tax conditions, including the US “Many leaders believe Canada’s tax system is penalizing success and increasing the risk of wealth and jobs leaving the country,” said Dino Infanti, KPMG’s national private enterprise tax leader.