A new report by Zensurance indicates most Canadian small business owners say AI has not meaningfully changed the way they operate.
The 2026 Zensurance Small Business Confidence Index says the technology remains largely in the background for the majority of small businesses.
“Small business owners are constantly weighing where to invest their limited time and resources,” said Danish Yusuf, CEO and Founder of Zensurance. “This year’s findings show they are prioritizing stability, operational strength and resilience. Whether that means adopting new technology, improving efficiency or protecting against unexpected setbacks, a proactive approach is what helps businesses stay strong as conditions keep changing.”
Key findings of the national survey of 1,000 Canadian small business owners, entrepreneurs and self-employed professionals:
- 49 per cent say they remain confident about the months ahead;
- 32 per cent say AI has had little to no impact on their business, and another 27 per cent say they are not sure how it even applies to what they do. Only one-in-four report a positive effect, and just nine per cent credit AI with meaningful productivity gains or cost savings. Meanwhile, seven per cent say it has hurt their revenue or client base;
- Among those who have concerns about AI, their top worry is competitive pressure: 13 per cent say AI will make their products or services less competitive, 10 per cent say AI tools are not reliable or accurate enough to trust, and nine per cent worry about job displacement and the loss of human labour;
- More plan to introduce new products or services (26 per cent), expand into new markets (22 per cent), or invest in new tools or equipment (20 per cent) than learn about or invest in AI (15 per cent);
- When given a hypothetical $10,000 business grant, the response was telling: 26 per cent would set it aside for cash flow, 20 per cent would pay down debt, 17 per cent would invest in tools or equipment and just seven percent said they would put it toward AI.
Founded in 2016, Zensurance is a source for small-business insurance.
In an interview with Retail Insider, Yusuf spoke about the report’s findings.
Why do you think the majority of Canadian small businesses have yet to see a meaningful impact from AI, despite the technology’s rapid adoption across larger companies and industries?
Larger companies have dedicated teams, budgets and time to test AI and figure out where it fits. Most small business owners have none of that. They’re the boss, the bookkeeper, the salesperson and the customer service department, sometimes all before lunch.
The 2026 Zensurance Small Business Confidence Index found 32% of owners say AI has had little to no impact on their business, and another 27% aren’t sure how it even applies to what they do. That’s roughly three in five owners sitting on the sidelines.
I don’t think most owners are against AI. It just hasn’t earned a spot on their to-do list yet. Some aren’t sure how it connects to what they do. Others haven’t had the time to sit down and figure out what it could mean for their business. And plenty are taking a wait-and-see approach. Once they see it making a real difference for a competitor or a business like theirs, it’ll jump up the list. That’s understandable when so much of the AI conversation is built around enterprise use cases, not the day-to-day reality of a contractor, a salon owner or a two-person consulting firm. Add small business confidence at a three-year low, and a lot of owners simply don’t have the bandwidth to experiment right now.
Here’s the catch, though. AI doesn’t have to be part of your business to affect it. Scammers are already using it to write convincing phishing emails, create fake invoices and even clone voices. So an owner who has never touched AI can still be exposed to it. In our survey, 14% of owners named cyberattacks or data breaches as their most significant business risk, yet 61% don’t have business insurance at all.
What differences did you find among small businesses that are benefiting from AI and those that remain unsure about how the technology applies to their operations?
The owners seeing results have usually done what many others haven’t had the time to do yet: they found a specific problem in their business and matched AI to it, instead of starting with the technology. About one in four owners we surveyed said AI has had a positive effect on their business, and 9% credit it with meaningful productivity gains or cost savings. Those wins tend to come from pointing AI at a real bottleneck, like writing quotes and proposals, answering routine customer questions, or chipping away at the admin that eats up evenings and weekends.
The owners who are unsure are often coming at it from the other direction. They keep hearing AI can do everything, which makes it hard to know where to start. Twenty-seven per cent told us they don’t know how it applies to their business at all.
It’s also worth saying AI isn’t a guaranteed win. Seven per cent said it has actually hurt their revenue or client base. For some businesses, AI is showing up as a competitor before it shows up as a tool.
How are concerns about AI’s reliability, competitive pressure and potential job displacement influencing small business owners’ willingness to adopt the technology?
These concerns are real, but they aren’t what’s holding most owners back. The bigger hurdle is time. Most owners haven’t been able to step away from running the business long enough to figure out where AI fits into it. Still, these worries shape how cautiously they approach it once they do.
Competitive pressure topped the list: 13% believe AI will make their products or services less competitive. That makes sense for businesses selling expertise, creative work or information, where customers can now try to do it themselves with a free tool.
Reliability matters, too. Ten per cent said AI tools aren’t reliable or accurate enough to trust. A small business can’t afford a costly mistake in front of a client. If an AI tool gets something wrong and a client relies on it, it’s the business on the hook, not the software company. Owners using these tools should understand that risk and check whether their coverage, like professional liability and cyber insurance, reflects how they’re working now.
Job displacement came in at 9%. Most small businesses already run lean, so for many owners, AI is less about replacing people and more about getting hours back.
With more owners prioritizing cash flow, debt reduction, new products and equipment over AI investments, what does this tell you about the immediate challenges facing Canadian small businesses?
It tells me owners are in stabilize-first mode. Earlier findings from this year’s survey results showed business confidence has fallen three years in a row, from 70% in 2024 to 49% in 2026. Four in five owners are operating with three months of cash reserves or less, 71% say operating expenses are up from last year, and 39% have used personal credit cards or home equity to keep their business running.
When you’re under that kind of pressure, a $10,000 grant isn’t a chance to experiment. It’s breathing room. That’s why 26% would set it aside for cash flow, 20% would pay down debt and just 7% would put it toward AI.
That’s how owners would spend a hypothetical windfall. Their broader plans for the business tell a slightly different story. Owners aren’t giving up on growth. More plan to launch new products or services (26%), expand into new markets (22%) or buy new tools and equipment (20%) than learn about or invest in AI (15%). They’re backing things with a clear, direct line to revenue.
The piece that concerns me is protection, with 61% of owners telling us they don’t have business insurance, nearly double the 33% we saw in 2024. As the financial pressure has built, more owners have gone without coverage. I understand the instinct to cut costs wherever you can. But you can spend years building a cash cushion and lose it to one lawsuit, break-in or cyberattack. Coverage is what keeps one bad day from undoing everything they’re working to stabilize.
Do you expect AI adoption among Canadian small businesses to accelerate over the next year, and what would need to change for more owners to see it as a practical investment rather than a longer-term opportunity?
I expect adoption to keep growing, but gradually rather than all at once. Right now, only 15% of owners plan to learn about or invest in AI, which tells me most still see it as a someday project.
For that to change, a few things need to happen. First, the tools have to fit small business reality: affordable, easy to set up and built into the software owners already use for invoicing, scheduling, bookkeeping or marketing. Second, owners need proof. Not a big promise about transforming their business, but clear evidence that a tool saves time or wins customers within weeks, ideally from someone in their own industry. Third, trust. Owners need to know the output is accurate and their customers’ data is safe.
The economy plays a role, too. When cash flow steadies, owners get the headspace to try new things.
The tipping point comes when AI stops feeling like a project and starts feeling like a better version of a tool they already rely on.
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