Cyber Security Tips for Ontario Small Businesses: 5 Common Threats

An email from a supplier you’ve worked with for years says their banking details have changed. The invoice looks legitimate, the amount is familiar and your bookkeeper sends the payment. Two weeks later, the real supplier calls to ask why they haven’t been paid.

Payment fraud is one of the cyber threats Ontario small businesses need to watch for. In 2023, about one in six Canadian businesses (16%) experienced a cyber security incident, and half of the businesses affected reported scams or fraud, according to Statistics Canada. 

October is Cyber Security Awareness Month, making it a good opportunity to review how your business handles common threats. This guide covers five risks to watch for, practical steps to reduce your exposure, what to do after an incident and how cyber insurance can help.

In This Article

• Why Cyber Security Awareness Month Matters to Ontario Small Businesses
• 5 Common Cyber Threats Facing Ontario Small Businesses
• Fake Invoices and Business Email Compromise
• AI-Assisted Phishing Scams
• Ransomware
• Stolen Passwords and Account Takeover
• Third-Party Data Breaches
• Cyber Security Checklist for Ontario Small Businesses
• What to Do in the First Hours After a Cyber Incident
• Privacy Breach Reporting Requirements in Ontario
• How Cyber Insurance Helps Small Businesses
• Frequently Asked Questions

Why Cyber Security Awareness Month matters to Ontario small businesses

The theme for Cyber Security Awareness Month 2026 is “Your best defence is you.” The Government of Canada’s Get Cyber Safe campaign focuses on practical habits, including recognizing scams, using stronger passwords and enabling multi-factor authentication.

These precautions are particularly useful for small businesses without dedicated IT staff. Training employees to recognize suspicious requests, verify payment changes and protect their accounts can reduce the risk of common cyber attacks. Technical safeguards are important too, but employees play a key role in keeping business information secure.

The financial consequences can be significant. According to Statistics Canada, Canadian businesses spent approximately $1.2 billion recovering from cyber security incidents in 2023, up from about $600 million in 2021.

5 common cyber threats facing Ontario small businesses

Cyber attacks can affect businesses of any size. Some involve fraudulent payment requests or stolen login credentials, while others can disrupt operations or expose sensitive information. The following five threats are worth understanding, along with practical steps your business can take to reduce the risk.

Fake invoices and business email compromise

Business email compromise (BEC) happens when a criminal impersonates a trusted contact to steal money or sensitive information. They may gain access to a supplier’s email account or use a lookalike address to send a fake invoice or request new banking details. They might also pose as the business owner and pressure an employee to make an urgent wire transfer or purchase gift cards.

Unlike ransomware, these scams don’t necessarily involve malware or locked systems. A payment can be redirected without anyone realizing the request was fraudulent.

How to reduce the risk of payment fraud

Require staff to verify changes to banking details and unusual payment requests by calling a trusted number already on file. Don’t use the phone number provided in the suspicious email. Document this procedure and make sure it applies to everyone, including requests that appear to come from the business owner.

AI-assisted phishing scams

Spelling mistakes and awkward wording used to be common warning signs of phishing emails. They’re less reliable today. The Canadian Centre for Cyber Security’s National Cyber Threat Assessment 2025–2026 identifies how criminals are using AI to create more convincing phishing messages and impersonate trusted individuals.

For small businesses, this could mean an email that appears to come from your bank, a fake voicemail imitating a manager or a text directing an employee to enter their login credentials on a fraudulent website.

How to reduce the risk of phishing

Train employees to look beyond spelling and formatting. Unexpected requests for passwords, sensitive information or urgent action should raise suspicion, even when the message looks professional. Encourage staff to avoid unfamiliar links, verify suspicious requests through a trusted contact method and report potential phishing attempts. Get Cyber Safe recommends including cyber security awareness in employee onboarding and providing ongoing training.

Ransomware

Ransomware is malicious software that can lock businesses out of their files or systems. Attackers may also steal sensitive information and threaten to release it unless a ransom is paid. The Canadian Centre for Cyber Security’s National Cyber Threat Assessment 2025–2026 identifies ransomware as one of the most serious cyber threats facing Canadian organizations.

According to Statistics Canada, 13% of Canadian businesses affected by a cyber security incident in 2023 experienced ransomware, and 88% of those businesses didn’t pay a ransom. Even without paying, businesses can face significant recovery costs, operational disruptions and potential exposure of sensitive information.

How to reduce the risk of ransomware

Back up critical business data regularly and test that you can restore it. The federal Get Cyber Safe guide for small businesses recommends backing up at least weekly or automatically, with a second copy of important data stored separately. Keep backups disconnected or otherwise protected from attackers where possible. Enable automatic operating system and software updates to help close security vulnerabilities that attackers could exploit.

Stolen passwords and account takeover

A stolen password can give criminals access to business email, accounting software or cloud storage. Once inside, they may be able to read confidential client files, send fraudulent invoices from a legitimate business email address or lock employees out of their accounts.

Password reuse increases this risk, particularly when employees use the same credentials for personal and work accounts. Former employees who retain access to business systems can also create security risks.

How to protect your business accounts

Enable multi-factor authentication (MFA) for business email, banking, accounting software and systems containing sensitive information. MFA adds another verification step, making it harder for someone to access an account using a stolen password alone. Require unique passwords for work accounts, limit administrator privileges to employees who need them and revoke access promptly when someone leaves the business.

Third-party data breaches

Your business data can be exposed through a supplier or software provider, even when your own systems haven’t been compromised. In 2023, attackers exploited vulnerabilities in MOVEit, a widely used file transfer application. The Canadian Centre for Cyber Security estimates that the attack affected approximately 2,750 organizations and 94 million people.

Small businesses rely on outside providers for payroll, booking systems, payment processing, email and file storage. If a provider experiences a breach, your business or customer information could be exposed, and you may still need to respond to the incident.

How to reduce the risk of third-party data breaches

Keep a list of the outside services that store or access your business and customer information, including what data each provider handles and who to contact if there’s a breach. The federal Get Cyber Safe guide for small businesses recommends keeping an inventory of digital assets and services. When evaluating providers, ask about security measures such as multi-factor authentication and encryption, as well as how they notify customers of security incidents.

Cyber security checklist for Ontario small businesses

Use this checklist to review your business’s existing safeguards and assign responsibility for improvements. For more comprehensive guidance, see the Canadian Centre for Cyber Security’s baseline cyber security controls for small and medium organizations.

What to do in the first hours after a cyber incident

A written incident response plan helps your business act quickly and limit the damage from a cyber attack. The Canadian Centre for Cyber Security recommends having clear responsibilities, contact information and procedures for responding to incidents.

If you suspect your business has been affected:

1. Report the problem internally. Employees should know who to contact immediately if they notice suspicious account activity, a possible data breach or an unauthorized payment. If money has been transferred fraudulently, call your bank right away to request a recall or recovery.
2. Contain the incident. Isolate potentially compromised devices from the network without shutting them down, where possible, to help preserve evidence. Contact your IT provider or a cyber security professional to investigate. If accounts are compromised, secure them using a trusted device.
3. Contact your broker or insurer. If you have cyber insurance, report the incident promptly. Your policy may provide access to incident response specialists and set out requirements for notifying the insurer or obtaining approval before incurring certain expenses.
4. Report the incident to the appropriate authorities. Report suspected fraud to your local police and the Canadian Anti-Fraud Centre. You can also report cyber incidents to the Canadian Centre for Cyber Security.
5. Recover your systems. Work with your IT provider to identify and address the cause of the incident before restoring affected systems from clean backups. Keep records of what happened and the actions taken.

Privacy breach reporting requirements in Ontario

Cyber incidents involving personal information may also trigger legal reporting obligations.

Under the federal Personal Information Protection and Electronic Documents Act (PIPEDA), businesses subject to the law must report breaches of security safeguards involving personal information that create a real risk of significant harm. They must also notify affected individuals as soon as feasible and retain records of all breaches involving personal information for at least 24 months, even when reporting isn’t required.

The Office of the Privacy Commissioner of Canada provides guidance on assessing and reporting breaches. Ontario health information custodians have separate obligations under the Personal Health Information Protection Act (PHIPA). If you’re unsure which requirements apply, seek legal advice.

How cyber insurance helps small businesses

Cyber security measures reduce risk, but they can’t prevent every incident. Standard commercial general liability (CGL) insurance generally doesn’t provide the dedicated coverage businesses need for data breaches, ransomware and other cyber incidents.

Depending on the policy, cyber security insurance can help cover expenses such as IT forensics, data recovery, lost income during covered business interruptions, breach notifications and legal claims arising from exposed information. 

Cyber insurance also has limitations. It doesn’t prevent an attack or eliminate the potential damage to customer relationships. Coverage for payment fraud, such as an employee being tricked into transferring money, may be limited, excluded or available through a separate endorsement. Insurers may also review your security practices, including backups, multi-factor authentication and employee training, when assessing an application.

It’s important to understand what your policy covers, its exclusions and any conditions that apply before an incident occurs.

At Oegema, Nicholson & Associates, we can help you review your existing coverage and identify potential gaps. Our small business insurance and commercial insurance resources provide more information about the options available to Ontario businesses.

Frequently Asked Questions