Canadian small and medium businesses continue to reduce their borrowing activity according to data released by PayNet.
For small companies, this is the fifth consecutive month of decline, a worrying trend which shows how tough the investment climate has become in the country.
Canada has been struck by drops in commodity prices, not helped by the recent wildfires that ravaged huge amounts of oil production.
PayNet’s Canadian small business lending index found that every industry saw declines except the wholesale sector. PayNet President Bill Phelan told Reuters: "What we're looking at is slower GDP and probably lower credit quality for the future in Canada.
"The contagion is broadening and impacting the smallest companies, which are the leading bellwethers for where GDP is going."
This follows news from the OECD which reported that Canada’s economy was resilient but in need of more reform in order to move away from reliance on oil exports.
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