In 2025, small and medium-sized enterprises (SMEs), businesses with fewer than 500 employees, constitute 99.8% of all businesses in Canada. Small and medium-sized businesses (SMBs) in Canada face an increasing range of cybersecurity threats that have the potential to disrupt operations, damage reputations, and cause significant financial loss.
As SMBs often lack the robust resources of larger corporations, they can be more vulnerable to cyberattacks. The biggest cybersecurity threats to Canadian SMBs today include ransomware, phishing and insider threats. Each of these attack vectors pose unique challenges, but with the right strategies and proper investment, SMBs can mitigate the risks and strengthen their cybersecurity posture. Keep reading to see how.
In this article, I’ll break down these pressing threats, provide real-world examples and offer best practices that Canadian SMBs can follow to safeguard their operations.
Ransomware remains one of the most dangerous threats facing Canadian SMBs. These attacks involve malicious software that encrypt an organization’s data, rendering it inaccessible until a ransom is paid. While large corporations are often the headlines’ focus, SMBs are increasingly becoming primary targets due to their relatively weaker cybersecurity defenses.
Real-World Example:
A notable example is the cyberattack on London Drugs, a prominent Canadian retailer, in May 2024. The LockBit ransomware group claimed responsibility for this attack, demanding a $25 million ransom and causing the temporary closure of all London Drugs stores nationwide from April 28 to May 7, 2024. Despite the severity of the attack, London Drugs refused to pay the ransom and reported that no customer or primary employee data was compromised
In 2020, a Canadian SMB in the healthcare sector was hit with a ransomware attack that resulted in the loss of critical patient data. The company was forced to pay a ransom to restore the data, but the attackers also leaked sensitive information online, leading to severe reputational damage and regulatory fines.
This attack highlights the risks that SMBs in critical industries, like healthcare or finance, face. Ransomware groups often target businesses that rely on sensitive data, assuming these businesses are more likely to pay the ransom to avoid data loss or compliance violations (CSE, 2024).
Best Practices:
Regular Backups: Regularly backing up data and storing it offline or in a secure cloud environment is crucial. Use the 3-2-1 rule: three copies of data, two different storage types, and one offsite copy (CSE, 2024).
Endpoint Protection: Use endpoint detection and response (EDR) tools to monitor devices for suspicious activity and block ransomware before it can encrypt data (CSE, 2024).
Employee Training: Since many ransomware attacks originate from phishing emails or malicious attachments, educating employees on how to spot these threats is essential (CSE, 2024).
Incident Response Plan: Having an incident response plan in place that includes ransomware-specific protocols can minimize downtime and help businesses recover more quickly.
Phishing attacks are another major threat to Canadian SMBs. These attacks often involve fraudulent emails that attempt to deceive employees into revealing sensitive information, such as login credentials, financial information, or access to company networks. Cybercriminals increasingly use sophisticated techniques to make phishing attempts more convincing.
Real-World Example:
A popular Canadian e-commerce store was recently targeted by a phishing attack, where an employee received an email that appeared to come from the company’s CEO. The email instructed the employee to transfer a significant amount of money to a “trusted vendor.” The email looked legitimate, but it was, in fact, a social engineering attack designed to steal funds (CSE, 2024).
Phishing attacks are particularly dangerous because they exploit human error. Even with security measures in place, employees can still fall for convincing emails, leading to data breaches, financial theft, or unauthorized access to business systems.
Best Practices:
Multi-Factor Authentication (MFA): Protect critical systems like email, finance, and cloud services. Even if passwords are stolen, MFA blocks unauthorized access.
Email Filtering: Prevent phishing emails from ever reaching employee inboxes with smart filtering or AI powered tools. (CSE, 2024).
Employee Awareness Training: Conduct regular training to educate employees on the latest phishing techniques and how to identify suspicious emails. (CSE, 2024).
Phishing Simulations: Test your defenses by simulating real phishing attacks and strengthening weak points.
Insider threats, where employees or contractors intentionally or unintentionally cause harm to a company’s cybersecurity, are a growing concern for Canadian SMBs. These threats can arise from a disgruntled employee, a contractor who leaves a system vulnerable, or an employee who accidentally shares sensitive information.
Real-World Example:
Insider threats pose significant risks to organizations, including those in the United States. A recent example is the case of Jack Teixeira, a Massachusetts Air National Guard member.
In 2024, Jack Teixeira was convicted for leaking highly classified documents related to the Ukraine war. He pleaded guilty to obstructing justice, acknowledging his illegal actions but justifying them as an attempt to expose alleged governmental dishonesty. Despite facing serious charges, Teixeira received a dishonorable discharge but no jail time.
In 2021, a Canadian marketing firm experienced a major data breach when an employee who was leaving the company took sensitive customer data and intellectual property with them. This insider threat not only resulted in data theft but also legal issues and damage to the company’s client relationships (CSE, 2024).
Unlike external threats, insider threats can be more challenging to detect because the attacker often has authorized access to the company’s systems. In some cases, the employee may not even realize they are compromising the company’s security.
Best Practices:
Access Controls: Implement the principle of least privilege, ensuring that employees only have access to the data and systems necessary for their roles. Regularly review and update access permissions, especially when an employee changes roles or leaves the company (CSE, 2024).
Employee Monitoring: Use monitoring tools that track user activity on company networks, looking for signs of unusual behavior that may indicate an insider threat (CSE, 2024).
Data Encryption: Encrypt sensitive data to prevent unauthorized access, even if an employee or contractor manages to steal it (CSE, 2024).
Exit Procedures: When employees leave, ensure a thorough offboarding process that includes revoking access to company systems, retrieving company devices, and changing passwords to shared accounts (CSE, 2024).
Cybersecurity threats can have a devastating impact on SMBs. The financial costs associated with a breach can include ransomware payments, legal fees, regulatory fines, and the costs of downtime. But the reputational damage may be even more significant. Customers who lose trust in a business due to a breach may take their business elsewhere, leading to long-term revenue loss.
Additionally, Canadian SMBs face increasing regulatory requirements regarding data protection. The Personal Information Protection and Electronic Documents Act (PIPEDA) and other provincial laws 3 requires businesses to take adequate measures to protect personal data and report any breaches. Failing to comply can lead to fines and legal action, further compounding the damage caused by a cyberattack (CSE, 2024).
While the threats are real, Canadian SMBs can take proactive steps to mitigate risks and build resilience against cyberattacks.
Prioritize Cybersecurity Investments: SMBs should allocate a portion of their IT budget to cybersecurity, including tools for threat detection, response, and prevention. Investing in cybersecurity upfront is far less costly than dealing with the aftermath of a breach (CSE, 2024).
Regular Security Audits: Conduct regular security audits and vulnerability assessments to identify gaps in your defenses. This will help you stay ahead of evolving threats (CSE, 2024).
Collaborate with Trusted Partners: Work with trusted cybersecurity vendors and providers who can provide expert advice and support in securing your systems. If you don’t have an in-house IT department, consider outsourcing your cybersecurity needs to ensure continuous protection (CSE, 2024).
Cybersecurity is an ongoing challenge for Canadian SMBs, but by taking a proactive approach and adopting best practices, businesses can reduce their risk of falling victim to ransomware, phishing and insider threats. With the right investments in technology, employee training and security protocols, SMBs can strengthen their defenses and protect themselves from the ever-evolving cyber threat landscape.
About the Author:
Luigi Tiano is the Co-Founder of Assurance IT, with 25 years of IT experience and a focus on cybersecurity. Connect with Luigi Tiano on LinkedIn or via Assurance IT.