In its overview of the financial services sector in Canada, the Department of Finance's June 2003 Consultation Paper includes a discussion of the small and medium-sized business financing marketplace in Canada. The paper asserts that "Canada's five largest bank concentration ratio is one of the highest in the world...", describes the banking industry as the dominant player in the SME market, and generally leaves the impression that there is not enough competition in this important area.

A constructive public policy dialogue amongst stakeholders requires an accurate picture of the marketplace. It is our view that, by emphasizing bank concentration ratios, Finance's paper does not present a full picture of the scope and intensity of competition in the SME marketplace in Canada. Indeed, this emphasis can lead to a misleading picture because it ignores one half of the market and because the degree of competition is determined by a number of variables other than the structure of an industry (i.e. its concentration).

In this regard, data from Statistics Canada and the work of third party research organizations demonstrate that the more appropriate measures of competition (choice, price and access to financing) all indicate a highly competitive marketplace. Moreover, the international evidence indicates that concentration ratios do not provide a robust and consistent explanation for differences in the degree of market competition. Instead, this international evidence finds that the contestability of markets, through the potential entry of new firms or by the ability of existing financial institutions to offer a wide range of financial services, is what really determines the extent of competition.

Based on the CBA's analysis of the evidence, the SME financing market is indeed highly competitive.

With respect to choice:

There is a wide variety of providers of financing to SMEs in addition to the six largest banks, including 1300 credit unions and caisses populaires, 12 smaller domestic banks and 40 foreign banks in Canada, 100 finance companies, over 100 life insurance companies, and a range of government finance providers;
Providers other than domestic banks represent more than half of the debt financing marketplace. Finance companies (including government finance providers), for instance, supply fully one-quarter of financing and credit unions and caisses populaires supply another 18%, while non-traditional financial institutions are increasing their market share significantly. Although important players, domestic banks hold less than one half of the market share of SME financing;
The extent of competition, and the choices available to SMEs, are even greater than the above would suggest, since debt financing is often provided by sources other than financial institutions. There exists a wide variety of different types of debt financing, allowing SMEs to choose the types that are most suitable to their circumstances. An examination of SME balance sheets reveals that only 35% of liabilities constitute loans from banks or credit unions. Other, non-financial institutions are also important sources, with
21% of liabilities from supplier credit, and
loans from individuals making up another 18% of liabilities.

It is useful to note, however, that credit card debt makes up less than 0.5% of liabilities.

Other forms of financing, often from sources other than banks, are also becoming increasingly important. Leasing, for example, has increased its market share by more than four times in the past 15 years and now provides $16 billion in financing.

With respect to price

By international standards, Canadian SMEs enjoy low prices for bank products. The Loan Pricing Corporation in the United States concludes that "Canadian businesses, and SMEs in particular, get a far better deal on financing costs than U.S. businesses at U.S. banks."
A study sponsored jointly by RBC, CFIB and CME concluded that "[S]everal studies have demonstrated that a basket of typical retail bank fees for small business in Canada are much lower than in the United States at virtually any modestly reasonable exchange rate assumption."
A recent PricewaterhouseCoopers study found that Canadian retail service charges to be generally at par with those in Australia and substantially lower than those in the United States.
According to the World Economic Forum's 2002-2003 Global Competitiveness Report, loan spreads in Canada are 88 basis points lower than in the U.K. and 128 basis points lower than in the United States, almost 300 basis points lower than in Australia and about 450 basis points lower than in Germany.

With respect to access

Loan approval rates in Canada are in the 80% to 90% range and are comparable to those in the United States.
According to the consulting firm Grant Thornton, the majority of medium sized businesses in Canada do not view access to financing as a major concern or barrier to growth. Indeed, 34% to 41% of Canadian survey respondents cited non-finance related issues as constraints to growth, more than double the proportion citing finance related issues as constraints to growth.

The irrelevance of concentration

The Consultation Paper emphasizes the level of concentration in Canada as a key factor, and leaves the impression that this has negative implications for the state of competition in Canadian banking. An examination of the international evidence suggests, however, that there is no consistent and robust relationship between concentration and indicators of competition. For example,

The United States, Italy and Germany all have substantially lower measured concentration ratios than Canada, yet they have higher interest rate spreads – substantially higher in the instances of Italy and Germany. Australia and the UK have moderate concentration ratios like Canada yet both have higher spreads – substantially higher in the case of Australia.
Finance-related constraints to growth (cost of finance and access to either working capital or long-term finance) are not consistently or significantly related to concentration levels.
A World Bank study concluded that concentration ratios have little value in explaining access to credit in modern, well developed and market oriented economies.
A study prepared for a Federal Reserve Bank of Cleveland conference on bank consolidation and competition concluded that "there is no evidence that banking system concentration is negatively associated with competitiveness."
These studies generally find that the key to competition is market contestability, not concentration.

In summary, Canada's financial services sector in general, and the market for the provision of financing to SMEs in particular, is highly competitive today and the intensity of that competition is likely to increase – to the benefit of both individual and business customers – in the future.

On June 23, 2003, the Department of Finance responded to the reports of the House of Commons Standing Committee on Finance and the Standing Senate Committee on Banking, Trade and Commerce regarding the merger review process. In doing so, Finance stressed the importance of competition in the marketplace so that individuals and small and medium sized enterprises (SMEs) would be able to find capital at reasonable cost. The government's paper places a great deal of emphasis on measures of concentration – it states, for example, that "Canada's five largest bank concentration ratio is one of the highest in the world, with approximately 77 percent of total deposits held by the top five banks in 1999." – and in this context leaves the impression that competition in the SME financing market is limited to the large banks.

In our view, this is not a full picture of the highly competitive SME market. As is discussed in this submission in more detail, concentration ratios are only one measure, and indeed only an indirect measure, of competition in the marketplace. Price, choice and access to financing are better indicators of competition. By taking a more comprehensive look at the marketplace, a clearer picture of the scope, nature and intensity of competition in the market emerges. Not only is there a great deal of competition between the major banks, this competition is enhanced by the myriad of other players in the marketplace for SME financing, from credit unions and caisses populaires, to finance and leasing companies and a wide range in between. In the end, this competition provides SMES with wide ranging choice of financial products and suppliers, ready access to capital, all at low prices.

This paper presents the banking industry's views of the nature and extent of competition in the financial marketplace. The evidence demonstrates, we believe, that Canada's SME community is well served by the banks in particular and the financial industry in general.

1. Sources and Providers of SME Financing in Canada

In assessing the range of competition in the market, it is important to note that, while financing is an important element, SMEs are also looking for a range of other services, including advice, financial planning, business plan development, access to financial and economic information, and so on. And indeed, in the Canadian financial services marketplace, there is a broad range of providers that SMEs and other businesses can access to help them manage and grow their business. A recent study jointly sponsored by RBC Financial Group, the Canadian Federation of Independent Business, and Canadian Manufacturers and Exporters highlighted this fact, stating that "One of the growing strengths of the financial services industry...is that there exists a broad array of providers within Canada such as banks, credit unions, leasing companies, insurance companies, pension funds and government-sponsored lenders."^[1] Figure 1 below provides a snapshot of the range of financial services providers in Canada that serve the SME market.

Although SMEs look to financial institutions to provide a range of financial services, the focus of this submission is on SME financing, given Finance's commentary about the banks' dominant role in this area. Finance's Consultation Paper focussed on debt financing. As noted below, however, this is only one aspect of SME financing. Set out below is a discussion of the array of financial services providers in three broad categories: debt financing, leasing, and equity financing.

Figure 1

Competitors in the Canadian Marketplace for SME financing In addition to the six largest domestic banks, there are a range of competitors, including: 12 smaller domestic chartered banks over 40 foreign-owned banks (as subsidiaries or foreign branches) 25 trust companies about 1300 credit unions and caisses populaires federal government lending agencies provincial government savings and lending agencies over 100 independent finance companies over 150 investment dealers over 100 life insurance companies, of which three are in the top nine financial services providers in Canada, as measured by market capitalization Also, the 2000 Statistics Canada Survey of Suppliers of Business Financing counts 6,550 financing firms with assets of at least $5 million.

Debt Financing

Debt financing is the most common type of external financing for most small businesses.^[2] According to the Survey of Suppliers of Business Financing, in 2001, debt financing authorized to SMEs totalled nearly $146 billion, of which less than half (49% or $70.6 billion) was supplied by domestic banks. Foreign banks operating in Canada provided about $9 billion, a further 6%. The Survey also shows that while domestic banks are an important source of business credit for SMEs, they are clearly not the only major players (Figure 2).

In addition to banks, the other large category of deposit-taking institutions in Canada are credit unions and caisses populaires. There are currently about 1300 credit unions and caisses populaires in Canada, ranging from small community credit unions to multi-billion dollar financial institutions such as Vancouver City Savings. Credit unions and caisses populaires play a key role in SME financing in Canada, accounting for approximately 18% of authorized credit to SMEs. Their role in SME financing is even more pronounced when examined on a regional basis, especially in provinces such as Quebec, British Columbia and Saskatchewan, where credit unions and caisses populaires are especially strong.

In recent years, finance companies have also become more prominent players in the SME debt financing market. There are over 1000 finance companies in Canada, many of which are associated with large international corporations such as the GE Capital group of companies, General Motors Acceptance Corporation, and CIT Group. These entities, combined with government financing companies (discussed below) supply nearly one quarter of SME credit in Canada.

Figure 2

Total Credit Authorizations for Firms with Authorizations under $1M (Market Size = $146 Billion)

One additional subcategory of lenders, which is not explicitly broken out in the data, should also be highlighted. Government-owned lenders authorized nearly $18 billion in SME credit in 2001. Examples of government-owned lenders include Farm Credit Canada, Business Development Bank of Canada, Export Development Corporation, Alberta Treasury Branches, Investissement Quebec, and Agricultural Financial Services Corporation (Alberta).

Lease Financing

Lease financing has become increasingly popular for SMEs in recent years, as an alternative to traditional debt financing, because of the different payment stream associated with lease financing, and because, in certain situations, lease financing may have tax advantages. According to the Canadian Financing and Leasing Association, 60% of leasing industry customers are SMEs. Further, the asset-based financing and leasing industry market share of new business investment in machinery and equipment has grown from an estimated 5% or less fifteen years ago to approximately 20%-25% today.^[3] While domestic banks and their subsidiaries play a role in the lease financing market (a role that is limited because of legislative provisions that prohibit banks from directly providing auto lease financing), there are a range of other providers with a much larger market share (Figure 3).

Figure 3

Suppliers of Lease Financing from SMEs in Canada, 2001 (Market Size = $16 Billion)

Specialized financing and leasing companies are the largest players in the lease financing market. As noted above, many of these companies are associated with large commercial entities and many specialize in providing leasing and purchase financing for the parent companies products (e.g. Ford Credit, Dell Financial Services, John Deere Credit, etc.). Others, such as the GE Capital group of companies and CIT Group, are more broadly-based financing and leasing firms.

Other financial services providers are also entering the lease financing arena, including credit unions, which have partnered with CULease Financial Services to offer lease financing nationwide, and government agencies such as Farm Credit Canada, which has been granted the power to provide leasing services to its clients.

Equity Financing

A third key source of business financing is equity financing, whereby the investor takes a direct ownership stake in the SME. The size of the market for small equity financing is difficult to gauge as much of this investment is informal (often referred to as "love money" or "angel investment") and therefore not captured by surveys of financing firms and institutions. There are few comprehensive estimates of the extent of small equity investment in Canada. One study, the 2001 Global Entrepreneurship Monitor Study, which focussed primarily on start-up firms, estimated that 3.8% of adult Canadians were investing directly in new business startups.^[4] This segment of SME financing is often identified as a weak point in Canada. The RBC-CFIB-CME study makes this point, noting that a key impediment to SME financing in Canada is "(t)he absence of a well-developed marketplace for 'love money', particularly the angel investors category that tends to play an earlier role than venture capital in financing young, risky and innovative start-ups." The study goes on to say that "This is due to tax policies, a shortage of high net worth individuals compared to the United States and the lack of a co-ordinated educational approach to opportunities as angel investors."^[5]

A 2002 study by Statistics Canada, based on balance sheet data from small businesses in 1996, found that financing from 'innovative sources' such as venture capitalists, silent partners, joint ventures, and other related firms accounted for approximately 4% of total financing of small firms.^[6] As the data for this study is seven years old, this may understate the true extent of informal angel investment as it does not taken into account the large increase in venture capital activity that occurred in recent years as well as changes made in provincial securities legislation designed to facilitate small scale equity investing.

What is generally clear, however, is that equity financing is most appropriate for early-stage firms that do not generate sufficient cash flow to service debt.

2. Structure of SME Finance

With the vast array of financing choices and options that are available, it should not be surprising to learn that SMEs take advantage of a variety of different financing tools and techniques. Statistics Canada's Survey of Financing of Small and Medium-Sized Businesses demonstrates this – see Figure 4 below.

Figure 4

Financing Instrument	% of SMEs that Use That Instrument


Loans from Financial Institutions	49%
Supplier credit	39%
Personal savings	35%
Personal credit cards	33%
Retained earnings	31%
Business credit cards	26%
Leasing	16%
Personal loans	14%
Loans from friends and relatives	10%
Government lending agencies	7%
Angel investment	4%

While Table 4 provides an overview of the types of financing instruments used, it does not provide guidance on the extent to which a financing instrument is used by SMEs. Fortunately, that information is also available as part of the Survey of Financing of Small and Medium-Sized Businesses, and is summarized below in Figure 5.

Figure 5

Breakdown of SME Liabilities by Type, 2000

This figure provides some interesting observations. In the first place, loans from banks and credit unions only account for 35% of SMEs' liabilities in total. Moreover, the role of trade credit in SME financing is significant and is often not captured in surveys of suppliers of business financing. Finally, despite the fact that 33% of SMEs use personal credit cards and 26% use business credit cards, the share of SME liabilities accounted for by credit cards is negligible, less than 0.5%.

3. Comparisons with Other Jurisdictions

By almost any measure, Canada's financial services sector compares favourably to other jurisdictions when it comes to financing and serving the SME community. As the joint RBC-CFIB-CME study put it, "The industry is a world leader on multiple measures of access to business financing and pricing." Below is a brief overview of some recent studies that have examined the issue in different countries as well as their findings.

RBC-CFIB-CME Study

As mentioned previously, RBC Financial Group, the Canadian Federation of Independent Business and the Canadian Manufacturers and Exporters recently released a joint study that examined SME financing in Canada and the U.S. The findings of the study highlight the strength of Canada's financial services sector in serving SMEs.

On pricing, the study states that "(A)ccording to the Loan Pricing Corporation, the spread between rates charged for loans to all size classes of borrower, but especially to smaller borrowers, is far narrower in Canada than in the United States. Canadian businesses, and SMEs in particular, get a far better deal on financing costs than U.S. businesses at U.S. banks."^[7]
On availability, the study finds that loan approval rates for SMEs in Canada are comparable to that of the U.S. despite the lower loan spreads in Canada. As such, the authors conclude that "This better deal on financing charges in Canada than in the United States does not come at the expense of refusing to grant credit instead of just restricting it through prices..." It goes on to state that, "Regardless of the size of the borrower, business loan approval rates at Canadian financial institutions lie between the 80-90% range."^[8]
On bank fees, the authors highlight the fact that Canadian SMEs pay much lower fees than their American counterparts. Specifically, the authors state that " (S)everal studies have demonstrated that a basket of typical retail bank fees for small businesses in Canada are much lower than in the United States at virtually any modestly reasonable exchange rate assumption."^[9]

World Economic Forum, The Global Competitiveness Report, 2001-2002

One of the impacts of competition in the Canadian financial services sector has been its impact on interest rate spreads. Interest rate spreads serve as an excellent indicator of competition because they reflect an important marketplace pricing mechanism. The interest rate spread measures the difference between the interest rate a financial institution charges on loans to its borrowing customers and the interest rate it pays to its depositing customers. According to the World Economic Forum's 2002-2003 Global Competitiveness Report, interest rate spreads in Canada are amongst the lowest in OECD countries (Figure 6).

Figure 6

Average Spread of Loans vs Deposit, Selected Countries

Grant Thornton International Business Owners' Survey

In 2003, U.S.-based consulting firm Grant Thornton conducted an international survey of medium-sized business owners in 19 countries, including Canada, to assess their structure, prospects, and barriers to growth.^[10] Of particular interest are respondents' views on perceived constraints to expansion. Among the constraints examined by Grant Thornton were three related to finance: "Shortage of Working Capital", "Shortage of Long-Term Finance", and "Cost of Finance". By all three measures, Canadian firms felt less constrained than those of most other major countries, including the U.S. and the average of the European Union (Figures 7-9).

Figure 7

Percentage of All Respondents Saying "Cost of Finance" is Constraining Their Ability to Grow

Figure 8

Percentage of All Respondents Saying "Shortage of Working Capital" is Constraining Their Ability to Grow

Figure 9

Consistent with recent member surveys taken by the Canadian Federation of Independent Business, the Grant Thornton survey finds that other issues such as regulation and labour shortages are of principal concern to SMEs. Specifically, the Grant Thornton survey states that

"The greatest perceived constraint on expansion plans (for medium-sized businesses in Canada) is the availability of a skilled workforce (41%) -- this is 10% higher than the corresponding global figure. Regulations/red tape are also perceived as being restrictive to Canadian businesses (34%)."^[11]

For Canadian SMEs, therefore, non-finance related constraints to growth (in the 34% to 41% range) are more important than those related to access to financing, where those expressing a concern range from 12% to 19% of respondents.

4. Concentration and Competition

As noted above, Finance's Consultation Paper asserts that "Canada's five largest bank concentration ratio is one of the highest in the world...", describes the banking industry as the dominant player in the SME market, and generally leaves the impression that there is not enough competition in this important area. This section is intended to demonstrate that focussing on concentration ratios does not provide a full and balanced portrayal of the state of competition in the Canadian marketplace.

Figures 10 to 12 below look at the relationship between measured concentration ratios, i.e. the market share of the largest banks (usually the largest 3 or 5), and potential constraints to growth for business. They use the same Grant Thornton data used in Figures 7 to 9. The charts consider the G-7 nations plus Australia and the Netherlands as relevant comparator countries for Canada, and group these jurisdictions according to measured concentration ratios.

If concentration ratios are a good measure of competition, one would expect to see barriers to growth being the lowest in the low-concentration countries (Italy, Germany, Japan and the United States), because these countries would have the greatest amount of competition. Barriers would be somewhat higher in the medium-concentration group of countries and highest in the Netherlands, which is a high concentration country. It is clear from these charts, however, that no such pattern emerges. Whether we are looking at access to working capital, long term capital, or the cost of financing, these potential constraints to growth do not seem to be linked to concentration levels. The medium concentration group of countries, which includes Canada, face fewer constraints to growth than do the low-concentration countries. Moreover, there is no indication that constraints to growth in the Netherlands are consistently or substantially higher than for lower-concentration markets. Indeed, in some instances the relationship seems to be the opposite of what is expected.

Furthermore, a comparison between Canada and the United Kingdom is instructive. Although both are considered to be characterized as having moderate concentration levels, the top five banks in the United Kingdom have a market share that is about one-half that of Canada's. Nevertheless, there is no consistent or substantial difference in the degree to which the two financial systems support business growth. Once again, concentration is not a good indicator of how a market performs.

There are several possible explanations for this lack of empirical support. In some cases, low concentration rates are largely illusory. National concentration rates, because the banking systems consist of large numbers of local and regional banks, do not provide an accurate picture of local market competition. An SME located in, say, Kansas City has access largely to the local banks in the community. It does not have access to the vast majority of American banks. By contrast, an SME located in Winnipeg has access to all of the major Canadian banks, as well as most of the major non-bank financial institutions as well.

More importantly, however, the degree of competition in a market is due to a variety of factors in addition to structure. A recent study for the World Bank^[12] found, as expected, that greater competition had a positive impact on access to credit by businesses, both large and small, and that the impact was strongest for small businesses. This World Bank study also found that concentration ratios have little value in explaining access to credit in modern, well developed and market oriented economies, such as the countries examined in Figures 10 to 12. Another paper,^[13] found that there is "no evidence that banking system concentration is negatively associated with competitiveness." It concluded that changing patterns in the way in which financial services are produced and distributed, coupled with changing regulatory environments, has altered the nature of competition in financial markets and found that increased concentration might actually increase competition in some situations – this is consistent with some of the charts below. It further found that competition was positively related to the contestability of markets and that measures which restricted the activities of banks tended to lessen competition.

Figure 10

Shortage of Long-Term Finance

Figure 11

Shortage of Working Capital

Figure 12

Cost of Finance

Whether using the data from the World Bank or Grant Thornton, the conclusion is the same. Measured concentration ratios are largely irrelevant, by themselves, in explaining the degree of competition because a variety of other factors affect competition and access to capital. The World Bank study concludes that "the relation of bank concentration and financing constraints turns insignificant in countries with well developed institutions, high levels of economic and financial development and a high share of foreign banks." That description accurately reflects the situation in Canada as well as the other countries in the sample and, consequently, it should not be surprising that the degree of concentration has very little impact on access to financing as shown in these three figures.

Another way to look at market structure is to consider the number of bank branches per capita and to correlate that figure with the various measures of access to capital. Figure 13 shows how bank branches per capita are related to the shortage of long term finance. There is no clear, strong relationship, in this chart, between the number of bank branches per capita and concentration, nor does there appear to be a relationship between numbers of branches and access to capital. This is not surprising. Bank branches measure physical access points but miss a wide variety of electronic access points such as the internet and telephone banking. More importantly, both concentration and numbers of branches do not measure behaviour, attitudes and regulatory flexibility.

The World Bank study concurs with this approach, arguing that structure is but one measure of competition. Other variables which determine the competitive nature of a market include contestability, absence of government interference, and a restrictions on bank activities.

Figure 13

Bank Branches and Contraints to Growth

With respect to contestability, the Canadian market is very much open to new providers who have the ability to attempt to capture as much market share as they wish, free of artificial constraints. In addition to a number of new banks that have been created in the last two years, we are also seeing a growing use of relatively new, and non-traditional, financial institutions. According to a recent Canadian Federation of Independent Business survey of its members, for instance, nearly three-quarters of respondents used the services of ING, Capital One, AMEX, GE Capital, MBNA or Wells Fargo in 2003. Three years earlier, only a quarter of survey respondents used any one of these institutions. Given the fact that these institutions, or their parent institutions, are as large as, and in several instances much larger than, the biggest Canadian banks, they possess the potential to gain even greater market share in the future.

5. Conclusion

Competition is ultimately a matter of firm behaviour, not industry structure. Using measures such as price, choice and access to capital, i.e. the measures that really matter to SMEs, it is clear that SMEs benefit from a highly competitive financial services marketplace in Canada. SMEs have access to a wide variety of types and sources of financing, as well as other financial services of importance to entrepreneurs. In addition to the six large banks, SME have access to 1300 credit unions and caisses populaires, 12 smaller domestic banks, 40 foreign banks, 100 finance companies and government finance providers. Moreover, almost 40% of SME liabilities represent supplier credit or loans from individuals.

Canada's SMEs enjoy better access to financing than do their counterparts in other leading jurisdictions, in particular the United States. SMEs in other countries tend to consider access to financing as bigger challenges than do Canadian SMEs. Indeed, to the extent that Canadian SMEs face barriers to growth, they are primarily non financial in nature.

Canadian SMEs also enjoy competitively priced financial services. The cost of financing, as measured by the interest rate spread on loans and deposits, is significantly lower in Canada than in our peer group of countries such as the United States, the United Kingdom, Australia and Germany. This is also true of the broader range of banking products, with service charges in Canada being well below those in the United States.

In light of the openness of the Canadian market to new entrants, it is likely that this level of competition – and the benefits competition brings to consumers – will continue to increase in the future.

^1.

RBC Financial Group, CFIB, and CME, The Path to Prosperity: Canada's small- and medium-sized enterprises. October 2002. p. 20. [Return]

^2. Excluding sources of internal financing such as owner's equity and retained earnings. [Return]

^3. Canadian Financing and Leasing Association website. (http://www.cfla-acfl.ca/about.cfm) [Return]

^4. Rein Peterson, Nathaly Riverin, and Robert Kleiman. Global Entrepreneurship Monitor: 2001 Canadian National Executive Report. [Return]

^5.

The Path to Prosperity: Canada's small- and medium-sized enterprises. October 2002. p. 25. [Return]

^6. John Baldwin, Guy Gellatly and Valérie Gaudreault, Financing Innovation in New Small Firms: New Evidence from Canada. Research Paper No. 190. May 2002. [Return]

^7.

The Path to Prosperity: Canada's small- and medium-sized enterprises. October 2002. p. 20. [Return]

^8.

The Path to Prosperity: Canada's small- and medium-sized enterprises. October 2002. p. 21. [Return]

^9.

The Path to Prosperity: Canada's small- and medium-sized enterprises. October 2002. p. 21. [Return]

^10. Grant Thornton International Business Owners' Survey. (http://www.grantthorntonibos.com). Note that for the purpose of the study, a "medium-sized business" in the context of Canada was considered to be a firm with between 50-250 employees. [Return]

^11.

Grant Thornton International Business Owners Survey (Individual Countries Summary -- Canada). p. 2. [Return]

^12.

Thorsten Beck, Asli DemirgÃ¼ç-Kunt, and Vojislav Maksimovic, Bank Competition, Financing Obstacles and Access to Credit, World Bank Policy Research Working Paper 2996, March 2003 [Return]

^13. Stijn Claessens and Luc Laeven, What Drives Bank Competition? Some International Evidence, Paper presented at the conference Banking Consolidation and Competition, sponsored by the Federal Reserve Bank of Cleveland, May 21-23, 2003. [Return]