estimates that two-thirds of Canada’s online shoppers have made purchases from U.S. merchants. This report by Microsoft (2015) adds further support to the position held by Gessner and Snodgrass (2015). It found that Canadian SMEs could see a 25% increase in revenues if they sold both online and cross- border (Microsoft, 2015). While a large sales opportunity exists for Canadian SMEs in the U.S., Gessner and Snodgrass (2015) explain that relative few SMEs have taken advantage of e- commerce and cross-border opportunities.

Reports by Sweet (2012) and PayPal (2017) help explain why SMEs have failed to adopt e-commerce capabilities. In a Report of the Standing Committee on Industry, Science and Technology, MP David Sweet (2012) attributed the disinterest of SMEs in adopting e-commerce capabilities was primarily due to their high costs. Sweet (2012) concludes that SMEs simply do not believe the costs justify the investment. Five years later the negative sentiment among SMEs has not changed. A study by PayPal (2017) on the Canadian Small Business Landscape found that only 7% of Canadian SMEs had an e-commerce enabled website. While 71% of SMEs indicated they would never consider selling online, and 34% of SMEs did not plan to build a website in the future (PayPal, 2017). The study found concerns related to levels of service, online fraud, order fulfillment and a limited understanding of technology as the main barriers to adoption. The lack of e-commerce capabilities and negative sentiments among SMEs towards websites have a few troubling implications.

Problem I

The first implication is related to e-commerce growth as an industry in Canada. A website, is essential for allowing SMEs to participate in e-commerce. Mohammad (2018) and Burnett (2017) have linked the slow growth of e-commerce in Canada on the reluctance of SMEs to adopt new technologies such as websites. It is important to note that Canada is considered a laggard in e-commerce when compared to other markets. Canada trails the USA in total retail e-commerce sales by a large margin. In 2018, Statistica reported that retail e- commerce in the USA sales grew by 13% to $504 million. This sales figure is approximately 10 times larger than the total recorded by Statistica for Canada in 2018.

While SMEs may not be entirely at fault they play a vital role in the economy and therefore are believed to contributes to the problem. Statistics Canada (2019) explain that SMEs account for 54.2% of the economic output of the business sector. The largest number of SMEs can be found in the retail and wholesale trade