AI Usage Grows Quickly Among Canadian Small Businesses, But Still Lags Well Behind the US

For Small Business owners, every decision matters and every minute counts; they have tons of work to do, but compared with larger businesses they have fewer hands to help, and the same 24 hours in every day. So with the potential power of AI to help – or to completely do – certain key tasks for businesses, it is not surprising that Canadian business leaders have had their eyes on AI for quite some time. However over the past several years, AI has gone from a trend being watched to a tool being utilized for a large number of Canadian Small Businesses. 

(Findings are from the most recent wave Harris Poll Canada’s quarterly BizPulse study, fielded in July, 2024. “Small Business” is defined as having fewer than 100 employees.) 

As AI usage increases both among consumers and businesses, most Small Business leaders have come to understand that AI is here to stay, and is something they will have to understand and use in order to keep up. However, they continue to show a healthy mix of excitement and cautiousness when it comes to the prospect of integrating AI into their business. Small Business users see AI as being very much a mix between opportunity and risk, and between exciting and scary. 

AI Usage Has Grown Substantially, Is No Longer Just for Large Businesses

In 2020 when we first asked about AI usage, just 32% of Canadian Small Business leaders reported using AI for any reason. At that time, while users were happy with the impact AI was having on their business, the vast majority of non-users reported having no interest in starting to use AI; in fact, just 10% of non-AI users in 2020 reported they thought they would begin using AI in the next five years, while 63% said they would “never” use AI. Fast forward just three years, and AI usage has far surpassed what business leaders had predicted; AI usage among Canadian Small Businesses has increased by two-thirds (from 32% in 2020 to 54% in 2024), and most AI users (73%) say their AI usage will continue to increase over the next year. 

Small Businesses Are Using AI for a Variety of Purposes

Among the nearly six-in-ten Canadian small businesses that are using AI, a wide variety of use-cases are identified where AI is being put to work. These tasks span from simpler executions such as data analysis and writing emails, to more complex executions such as helping with product design and innovation. The top ten use-cases for AI among Canadian Small Businesses are: 

• Writing at least some of our communications 
• Improving sales and marketing decisions 
• Consumer behaviour forecasting and product recommendations 
• Smarter email marketing 
• Data collection and analysis 
• Reducing or automating repetitive, mundane tasks 
• Innovating our products and services 
• More effective learning and training 
• Helping with bookkeeping and accounting 
• Pricing decisions/strategy

Over the past three years, the top five areas where AI usage has grown among small businesses are: 

• Consumer behaviour forecasting and product recommendations 
• Automated customer service (e.g., chatbot) 
• Smarter email marketing 
• Streamlining hiring and onboarding processes 
• Integrating into our customer-facing product

Those Using AI Say It Has Been Helpful, and Intend to Use It More in the Future

More than nine-in-ten Small Business leaders using AI (93%) say it has been helpful, including one-quarter (24%) who say it has been “hugely helpful” for their business. With so many users saying AI has been helpful, it is no surprise that three-quarters (73%) of Small Businesses using AI say they plan to increase their AI use over the next year, while just 1% say they plan to decrease their AI usage. 

AI Usage Among Small Businesses is Higher Than Most Estimates

One interesting finding from our research suggests that many Small Businesses leaders may not think of themselves as “AI users”, even though they actually are using AI in one or more ways. This finding came to light over several waves of our study, in which we asked about AI usage in two distinct ways. Firstly when asked with a simple yes/no question whether they use AI (in our Q1 2024 wave), just 29% say “yes”, indicating the majority of Canadian small businesses do not think of themselves as AI users. However when prompted with a list of use-cases (Q4 2023), 58% pinpoint at least one way that their business uses AI. This would suggest that many AI implementations are becoming second-nature, and may not be overtly even though of as being “AI”.

While Increasing, AI Usage Among Small Businesses in Canada Lags Far Behind the US

Canadian Small Business leaders are embracing AI quickly and in many different ways, however seem to be taking a much more cautious approach to its use than their American counterparts. 

Conclusion

AI growth among Canadian Small Businesses has hugely outpaced the growth rate predicted by leaders just four years ago, underlining how far this technology has come in a short period of time. While Canadian business leaders seem open to further embracing the role AI can play in their business, they remain somewhat cautious about its implementation. Despite this caution, we are likely to see significant growth in the coming years in the number of Canadian Small Businesses using AI, and the breadth of ways they are using it.