Ottawa, Ontario--(Newsfile Corp. - March 4, 2025) - The Canadian Financing and Leasing Association (CFLA) has released a new report, Canada's Economic Rocket Fuel: How a Switch in Canada's Financing Paradigm Could Help Solve its Productivity Problem, offering a practical strategy to revitalize Canada's flagging economy. This report highlights a critical, often-overlooked factor hampering growth: the inability of small businesses to access the financing they need to scale up and drive productivity.
"Productivity is the backbone of economic growth, yet Canada lags behind its global peers," said Michael Rothe, CFLA's President and CEO. "The numbers don't lie-our country's GDP per hour worked is among the lowest in the OECD, and business investment has been in decline for over a decade. This is not a theoretical issue; it's a real-world challenge that is currently limiting job creation, innovation, and national competitiveness."
The report argues that a fundamental dynamic behind the productivity challenge in Canada traces its roots to a long-standing gap in the Canadian financial market. The 2008 financial crisis led to the consolidation of major banks, shifting competition levels and market priorities, thus leaving many small and medium-sized enterprises (SMEs) underserved. Without a reliable, affordable and adapted access to capital, many of these businesses-which employ over 64% of Canada's workforce-have had acute challenges in acquiring productivity-enhancing assets such as heavy farming machinery all the way to office supplies.
Drawing lessons from international models, particularly the British Business Bank's ENABLE program, the report proposes multiple solutions that would help reshape and improve the finance sector's role in improving Canadian productivity.
Key recommendations include:
- Expanding the Business Development Bank of Canada's (BDC) indirect lending portfolio to ensure more financing reaches SMEs.
- Introducing securitization programs that bundle SME loans to reduce risk and attract private investment.
- Strengthening partnerships between independent financing and leasing companies and major financial institutions to foster a more competitive, agile and innovative financial ecosystem.
"Small businesses drive productivity, but they need the right financing tools to succeed," added M. Rothe. "These Canadian SMEs are seeking accessible and adapted financial support, and while Canada's independent financing and leasing companies are ideally positioned to fill this gap, they do need better support, recognition and integration into the financial system. This report provides a made-in-Canada roadmap to make that happen."
The report is now officially accessible on the CLFA's website: Canada's Economic Rocket Fuel.
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About CFLA:
The Canadian Finance & Leasing Association is the only organization in Canada representing the asset-backed finance, vehicle, and equipment leasing industry's interests. The CFLA represents over 200 member companies and more than 3,000 persons working directly in the industry.
For more details, please contact:
Taylor-Marie Murphy, Communications Officer, taylor-marie@cfla-acfl.ca, 416-860-1133 x4
Charles Bernard, Lead Economist, charles@impactcanada.com, 819-674-9604
To view the source version of this press release, please visit https://www.newsfilecorp.com/release/243249
SOURCE: Canadian Financing and Leasing Association
