The threats are evolving, but the fundamentals still matter most.
Every year, Verizon publishes the Data Breach Investigations Report (DBIR), the gold standard in cybersecurity research. The 2026 edition analyzed over 31,000 real-world security incidents and more than 22,000 confirmed data breaches across 145 countries. This makes the largest dataset in the report's 19-year history.
The message is clear: cybercriminals are getting faster, smarter, and more creative. But for Canadian small and medium-sized businesses (SMBs), the most important takeaway is this: the basics still matter most, and the organizations that get them right are the ones that survive.
Here are the findings every Canadian business owner and IT decision-maker needs to know.
For the first time, exploitation of vulnerabilities surpassed stolen credentials as the top initial access vector, rising to 31% of breaches, a 55% increase from the prior year. Meanwhile, only 26% of critical known exploited vulnerabilities (CISA KEV) were fully patched by organizations in 2025, down from 38% the year before, and the median time to fully remediate jumped to 43 days.
Why this matters for Canadian SMBs: Many small businesses rely on internet-facing applications, VPNs, and firewalls that require regular patching. Without a disciplined vulnerability management program, your business is leaving the front door wide open. Attackers are scanning the internet for any unpatched system, regardless of size.
What to do: Implement a risk-based vulnerability management process to identify, prioritize, and remediate exposures in internet-facing systems, particularly edge devices such as firewalls and VPN appliances and ensure critical vulnerabilities are addressed within days, not weeks.
Ransomware was present in 48% of all breaches, up from 44% the prior year. But here's the stat that should get every SMB's attention: of the ransomware cases where organization size was known, approximately 96% of victims were SMBs.
The silver lining? More organizations are refusing to pay; 69% of ransomware victims didn't pay in 2025, and the median ransom payment dropped to $139,875. This decline suggests that better backup strategies and incident response planning are making a real difference.
Why this matters for Canadian SMBs: Ransomware operators cast wide nets. They don't care if you're a 15-person accounting firm or a 200-person manufacturer. If they can encrypt your data and disrupt your operations, they will. Canadian privacy laws (PIPEDA) also require breach notification, adding legal and reputational costs on top of operational downtime.
What to do: Ensure you have tested, isolated backups (following the 3-2-1 rule). Develop and rehearse an incident response plan. Implement endpoint detection and response (EDR) across all workstations and servers. Discuss cyber insurance requirements with your broker. Most now require MFA, EDR, and backup verification as minimum controls.
Breaches involving third parties increased by 60%, reaching 48% of all breaches. Many of these stemmed from insecure authentication in cloud environments, such as missing MFA, weak passwords, and excessive permissions in SaaS, IaaS, and PaaS platforms. Only 23% of third-party organizations fully remediated MFA-related cloud exposures, and weak passwords and permission misconfigurations took nearly eight months to resolve.
Why this matters for Canadian SMBs: SMBs are heavily reliant on cloud services like Microsoft 365, accounting platforms, CRM tools, and managed service providers themselves. A breach at one of your vendors can directly expose your data, even if your own systems are secure.
What to do: Ask your vendors about their security practices and request SOC 2 reports. Enforce MFA on every cloud account, especially admin accounts. Review user permissions regularly and apply the principle of least privilege. Work with your MSP to monitor your cloud environment for misconfigurations.
Threat actors are now demonstrably using generative AI to assist with targeting, initial access, vulnerability research, and malware development. The median threat actor used AI assistance across 15 different attack techniques.
On the insider risk side, 45% of employees are now regular users of AI tools on corporate devices (up from 15%), and 67% are using non-corporate accounts to access AI platforms. This has become the third most common non-malicious insider action detected by data loss prevention (DLP) tools, with source code, images, and even research documents being uploaded to unauthorized AI systems.
Why this matters for Canadian SMBs: Your employees may be unknowingly feeding sensitive business data including client lists, financial records, proprietary processes into AI tools that your organization doesn't control or audit. At the same time, attackers are using AI to craft more convincing phishing emails and develop malware faster.
What to do: Establish a clear AI acceptable use policy. Provide employees with approved, corporate-managed AI tools so they don't resort to unauthorized ones. Invest in security awareness training that covers AI-related risks, and consider DLP solutions to monitor for sensitive data leaving your environment.
The human element was present in 62% of breaches. While email phishing remains the primary attack vector, attackers are increasingly targeting employees through voice calls (vishing) and text messages (smishing). Phishing simulations show that mobile-centric attack vectors have a 40% higher success rate than traditional email phishing. Pretexting, where attackers build trust through fake scenarios, often over the phone, is also growing as a pathway to ransomware attacks.
Why this matters for Canadian SMBs: Many SMBs have limited security awareness programs, and employees may not be trained to recognize social engineering attempts beyond the classic phishing email. With remote and hybrid work common across Canada, employees are more reachable on personal devices and less protected.
What to do: Expand your security awareness training beyond email phishing. Include voice phishing and text-based attack scenarios. Establish verification procedures for sensitive requests (e.g., password resets, wire transfers). If employees use personal mobile devices for work, consider a mobile device management (MDM) solution for visibility.
The 2026 DBIR's overarching theme is "keeping a strong foundation in the face of change." The threats are evolving. AI-augmented attacks, mobile-centric social engineering, and complex supply chain breaches are all on the rise. But the report makes one thing abundantly clear: organizations that master the fundamentals, including patch management, MFA, backups, access controls, and employee training, are the ones best positioned to weather what's coming.
As a Canadian SMB, you don't need to outrun the bear. You need to not be the easiest target. Working with a trusted managed service provider to implement and maintain these foundational controls is the most effective investment you can make in your organization's security.