Canada's small and medium-sized businesses are getting a major financial boost to compete in the artificial intelligence era. The Business Development Bank of Canada (BDC) has unveiled a $500-million loan program designed to help approximately 1,000 SMEs integrate AI technology into their operations—and it comes with expert guidance to ensure the investment actually pays off.
The LIFT initiative, which stands for "Lead with Innovation and Focus on Technology," represents a significant federal investment in closing what experts are calling a troubling productivity gap. The program launched Friday, offering loans ranging from $25,000 to $5 million that can be used for everything from software tools and data infrastructure to cutting-edge hardware like automation equipment and robotics.
Expert Help Comes Built In
What sets LIFT apart from traditional financing is its built-in advisory component. Before businesses can access the loans, they're connected with consultants who help identify where AI integration will deliver the biggest returns. This prevents the costly mistake of investing in technology that doesn't suit a company's actual needs.
"The program includes that component of advice to help make sure you're going to use AI when it pays off, and then give you the means to invest," BDC Chief Operating Officer Véronique Dorval said in a statement. "Entrepreneurs are trying to be thoughtful with their cash flow, and we want to support that."
Canadian Solutions Get Preferred Rates
The federal crown corporation is also incentivizing businesses to choose Canadian AI solutions and system integrators. Companies that opt for homegrown technology will qualify for a preferential interest rate of just 2.25 percent—a significant advantage that underscores Ottawa's commitment to building Canada's own tech ecosystem.
"LIFT supports not only productivity, but the Canadian ecosystem," Dorval noted, though she stressed that businesses choosing international solutions can still access the program at standard rates.
The Productivity Gap Is Growing
According to an upcoming BDC study, only 30 percent of Canadian SMEs were using AI as of 2025. That's a concerning statistic when you consider the competitive implications: businesses that did adopt AI showed 24 percent higher productivity than their non-using counterparts.
The numbers paint an urgent picture. The BDC estimates that if every Canadian SME achieved the same technological maturity as the country's most advanced companies, Canada's GDP could grow by as much as 14 percent. Yet that productivity advantage widens every year companies delay adoption.
"We know that this productivity gap is likely to widen if entrepreneurs don't adopt AI rapidly. Choosing not to adopt AI means that, from a competitive point of view, your position is going to be threatened by other players."
A Window of Opportunity
For Canadian SMEs watching competitors invest in artificial intelligence, LIFT removes a major barrier: financing uncertainty. By combining accessible capital with expert guidance on implementation strategy, the program positions smaller businesses to make confident, strategic decisions about their AI future.
Entrepreneurs interested in learning more about LIFT can visit the BDC website or contact their local branch. The program is available across Canada and targets businesses of all sectors looking to modernize their operations.
This story was based on reporting by BetaKit, Canada's leading startup and technology publication. Read the original article at BetaKit.com.