Launched in 2022, Canada’s Digital Adoption Program (CDAP) directly supports small and medium-sized enterprises (SMEs), assesses their digital readiness and applies for federal funding to capitalize on e-commerce opportunities, digitize operations, and adopt or upgrade digital technologies. CDAP includes two funding streams: Grow Your Business Online, which provides micro-grants to implement e-commerce capabilities and digital storefronts; and Boost Your Business Technology, which provides access to zero percent BDC interest loans and funds advisory services to develop digital adoption plans.
Within Canada’s Digital Adoption Program (CDAP), it is the author’s recommendation that the Government of Canada establish a Women’s Hub for E-Commerce Readiness (HER) to provide e-commerce opportunities, digital literacy resources, and mentorship networks for women-owned SMEs. Implementing this recommendation will advance Canada’s inclusive trade agenda, support national priorities for women and gender equality, and prepare SMEs to thrive in the growing domestic and international digital economy.
Challenge: Lack of e-commerce and digital literacy resources for women-owned SMEs
While their participation in the Canadian economy has increased over time, women-owned SMEs only encompass 17% of Canadian SMEs and disproportionately face challenges with accessing e-commerce resources. There is also a policy gap in providing e-commerce knowledge and resources to develop digital trade infrastructure for women-owned SMEs. Although CDAP offers two funding streams that all SMEs can apply for, neither one specifically targets women-owned SMEs or accounts for potential gaps in digital literacy. As such, there is a possibility that women-owned SMEs will be left behind in the rising digital economy.
There are additional export barriers for women-owned SMEs. In 2014, women-owned SMEs accounted for 15.7% of all SMEs, but only 11.1% of those that export. When analyzing the impact of technology-enabled trade on the ability of SMEs to export, it is evident that logistical, border, and administrative obstacles in domestic and global markets negatively impact a larger proportion of women-owned SMEs. However, technology and e-commerce can reduce these export barriers, especially for sectors in which most women-owned SMEs are concentrated in, such as retail and cultural services.
Current political landscape
As drivers of the Canadian economy, SMEs have adopted new technology in response to the pandemic and to increase access to the digital economy. Canada’s trade priorities, under the Trudeau administration, reflect the importance of e-commerce and digital trade for the country. This will increase accessibility for Canadian SMEs to international markets.
In 2022, Canada formally requested to launch negotiations to accede to the Digital Economy Partnership Agreement (DEPA). This trade policy instrument, which entered into force in 2021, focuses on digital inclusion and artificial intelligence, and aligns with World Trade Organization standards. This agreement will increase trade diversification opportunities and allow Canadian businesses and SMEs to better leverage the market potential offered through e-commerce.
Additionally, the Government of Canada has established policies to advance women’s participation in the economy. Nearly $7 billion has been invested in, and committed to, the Women’s Entrepreneurship Strategy (WES), which includes access to financing, expertise, networks, and resources across four initiatives. Housed within the TCS, Business Women in Trade (BWIT) facilitates opportunities for Canadian women-owned and women-led businesses to expand into global markets. Services include access to international business delegations and events, funding programs, export supports, and opportunities to diversify suppliers.
Why invest in women-owned SMEs?
Canada’s current trade strategy encompasses inclusivity and the advancement of trade policies that maximize benefits and digital trade opportunities for women. According to a recent Government of Canada report, training programs for e-commerce have been extremely effective at increasing the export participation of women-owned businesses. The proposed Women’s Hub for E-Commerce Readiness (HER), which would be a new initiative within the Canadian government, combines the aforementioned trade strategy priorities to enhance opportunities for women, and Canada as a whole, in the growing international digital economy.
Additionally, women-owned businesses are concentrated in the retail sector, which has shown promising growth in the last decade. In 2019, electronic retailers accounted for 9.5% of Canadian exports – three times more than in 2015. The COVID-19 pandemic also led to substantial e-commerce growth; data from Statistics Canada indicates that year-over-year retail e-commerce increased by over 110% from May 2019 to May 2020. Given e-commerce growth and government priorities to increase both digital and inclusive trade, it is an ideal time to invest in digitizing women-owned SMEs.
“Studies show that by advancing gender equality and women’s participation in the economy, Canada could add up to $150 billion in GDP .”
Innovation, Science and Economic Development Canada (ISED)
Investing in Canadian women-owned SMEs is not only part of Canada’s domestic priorities – it also aligns with broader international commitments on gender and trade. Since 2020, Canada has been a participant in the Global Trade and Gender Arrangement, which includes provisions to improve women’s access to trade and investment opportunities. This arrangement calls for improvements to women’s participation, education, and leadership in e-commerce by promoting services to improve women’s digital skills and access to digital tools.
HER operational recommendations
The proposed Women’s Hub for E-Commerce Readiness (HER) would achieve several ministerial priorities and create opportunities for collaboration across CDAP, WES, and BWIT. Incorporated within CDAP, HER would specifically support women-owned SMEs with funding, resources, and mentorship. This support would strengthen e-commerce potential, enhance export ability to international markets, and increase access to the digital economy. HER would include three important components
1. E-commerce and digital infrastructure capabilities. Targeted towards women-owned SMEs, HER would provide the same digital supports outlined in the existing CDAP, such as e-commerce capabilities, digital storefronts, advisory services, and digital adoption plans. Enhanced digital infrastructure will help mitigate additional barriers faced by immigrant women-owned SMEs, who have historically been overlooked and under-represented in Canada despite possessing greater global connections and propensities to export. Tapping into this export potential through additional digital infrastructure will create new e-commerce opportunities and support Canada’s inclusive trade agenda. A government report on trade barriers for women-owned SMEs details that improving access to digital trade technology is an effective means of strengthening overall export participation, especially for women-owned SMEs.
2. Digital literacy support. To supplement the resources provided through existing CDAP streams, HER would also include digital literacy training for women-owned SMEs. This will address the lack of digital literacy education as it relates to e-commerce for the specific sectors that women-owned SMEs are concentrated in, such as retail and cultural services. Growth in year-over-year e-commerce activities since 2020 indicates higher potential in the digital economy, which will only increase as Canada joins international digital trade agreements like DEPA. Providing foundational digital literacy knowledge for women-owned SMEs in sectors with high-growth potential will expand Canada’s participation in the global digital economy.
3. Mentorship and networking. Due to barriers mentioned above, women-owned SMEs are likely to be less aware of networks, capital, and information pertaining to their businesses, limiting accessibility to global markets and, thus, expansion potential. While the number of exporting women-owned SMEs in Canada increased from 5% to 11.1% between 2011 and 2017, tailored support and greater networking opportunities are crucial for future international market access. HER should provide mentorship, which could be coordinated through a community stream in the WES Ecosystem Fund, to improve networking options and fund accessibility beyond what can be offered through CDAP. Creating a women’s community mentorship program is a current governmental priority and is present in the mandate letters for both the Minister of International Trade, Export Promotion Small Business and Economic Development and the Minister for Women and Gender Equality and Youth.
The digital transformation of Canadian women-owned SMEs will be crucial in Canada’s continued economic recovery from the pandemic and for future participation in the international digital economy. Ultimately, it is in the best interest of Canada to invest in women-owned SMEs by providing greater e-commerce capabilities, digital literacy skills, and opportunities for mentorship and networking.
Emily Wesseling is a Policy Analyst with Natural Resources Canada, working on the Fuels Sector Intergovernmental Affairs team. She completed a MA in International Affairs and BA in International Studies and French. Emily’s research interests and experiences include Canadian foreign policy, Canadian immigration/refugee and security policy, Indigenous issues, health care accessibility, and climate change.
