Business Development Bank of Canada Takes Income Hit Amid Rising Bad Loan Risks

The Business Development Bank of Canada (BDC) reported a sharp drop in profitability as loan-loss provisions surged well above expectations. Net income came in at C$402 million, about C$92 million short of target, as provisions for potential loan defaults ballooned to C$624 million—roughly C$205 million more than planned.

The hit translated into a massive reduction in dividends to Ottawa, which collected only C$50 million, down from C$337 million a year earlier. The shortfall highlights the financial strain facing Canadian businesses amid tariff concerns and a weaker outlook.

Still, BDC expanded its reach, serving a record number of clients and boosting financing to women and Indigenous entrepreneurs. The bank has also taken on riskier lending, with loans to lower-rated businesses up 19% since 2020, underscoring its development mandate despite thinner margins.

Bottom line: BDC is sticking to its mission of sup

porting underserved entrepreneurs, but the cost is showing up on its balance sheet—and in Ottawa’s reduced payout.