Ransomware Hit 24% of Canadian Organizations in 2025: The Prevention and Recovery Playbook for SMBs

Ransomware is not an enterprise problem that occasionally spills over to smaller organizations. It is a small business problem that occasionally makes the news when it hits large ones.

The 2025 CIRA Cybersecurity Survey — conducted across 500 Canadian cybersecurity decision-makers in August 2025 — found that 24 percent of Canadian organizations were victims of ransomware in the previous 12 months. Of those victims, 74 percent had data exfiltrated before the attack was complete, and 74 percent paid a ransom, typically $25,000 or more. (CIRA 2025 Cybersecurity Survey) That is not a distant risk being carefully managed — it is the current operational reality for a quarter of Canadian organizations.

Canada recorded 352 confirmed ransomware cases in 2025, a 46 percent increase over the prior year. The Canadian Centre for Cyber Security's *Ransomware Threat Outlook 2025–2027*, published in January 2026, assessed the trajectory as almost certain to continue — and noted that while critical infrastructure and large enterprises are the highest-profile targets, the continued popularity of Ransomware-as-a-Service has lowered the technical barrier so substantially that any organization is a viable target. (CCCS Ransomware Threat Outlook 2025–2027)

Why SMBs Are the Primary Target Class

The Verizon 2025 Data Breach Investigations Report found that ransomware featured in 88 percent of SMB breaches — compared to 39 percent for large enterprises. (Verizon DBIR 2025) That number inverts a common assumption: in absolute terms, large organizations report more incidents, but as a proportion of breaches that do occur at a given organization, SMBs are dramatically more likely to encounter ransomware specifically.

The reason is structural. SMBs typically have fewer endpoint detection controls, less consistent patch management, no dedicated security team monitoring for indicators of compromise, and backup infrastructure that has never been tested under recovery conditions.

Modern Ransomware-as-a-Service marketplaces sell pre-built attack toolkits to affiliates who launch campaigns against targets identified by automated vulnerability scanning. The CCCS assessed that the continued popularity of RaaS "is almost certainly contributing to the rise in ransomware incidents by lowering the technical and administrative barriers to entry for more actors to carry out attacks." (CCCS National Cyber Threat Assessment 2025–2026) Campaigns that once required a skilled attacker can now be launched for a few hundred dollars a month by someone with no specialized technical knowledge.

Statistics Canada's 2023 cybercrime survey found that 16 percent of Canadian businesses were impacted by a cyber security incident, and that ransomware accounted for 13 percent of those incidents — up from 11 percent in 2021. (Statistics Canada, Impact of Cybercrime on Canadian Businesses, 2023) The trajectory is consistent.

What a 2026 Ransomware Attack Actually Looks Like

The contemporary attack playbook has three features that most standard security advice does not yet address.

Exfiltration before encryption. Sophos' *State of Ransomware 2025* report found that 75 percent of ransomware attacks now involve data exfiltration before encryption begins. (Sophos State of Ransomware 2025) This means organizations with clean, working backups still face a second problem: customer data, financial records, and employee information were already stolen before the encryption event that triggered the recovery process. The CCCS Ransomware Threat Outlook 2025–2027 separately flags "exfiltration-only" attacks — where groups skip encryption entirely and extort victims through threatened data publication — as an emerging Canadian threat category.

The compressed attack window. Mandiant's *M-Trends 2026* report found that initial access brokers are handing off compromised network access to ransomware affiliates in as little as 22 seconds. (Mandiant M-Trends 2026) The practical consequence: the gap between initial compromise and ransomware deployment has compressed to near-zero for AI-assisted attacks. Detection that operates on a delay of hours or days is not fast enough. Endpoint detection and response, not prevention alone, is the operative control.

Backup systems are in scope. Ransomware operators specifically seek and encrypt backup systems before triggering payload delivery against production environments. CCCS guidance is explicit on this: "if your backups are connected to your networks, threat actors can infect them, which will hinder your recovery efforts." (CCCS ITSAP.00.099) Sophos' 2025 data confirms the problem: use of backups as a primary recovery method dropped to a four-year low of 53 percent — down from 73 percent the prior year — likely because more victims discovered their backups were compromised or untestable.

The Ransom Payment Reality

The financial picture is not favourable regardless of the path chosen. IBM's *Cost of a Data Breach 2025* report put the global average cost of a ransomware or extortion incident at USD $5.08 million. (IBM Cost of a Data Breach 2025 – Canada) For Canadian organizations, the broader average breach cost reached CA$6.98 million — a 10.4 percent year-over-year increase. For SMBs with 100–250 employees specifically, Sophos' 2025 report found average recovery costs of USD $638,536 — not counting any ransom paid.

Several things are true about paying the ransom:

• It does not guarantee data recovery. Decryption keys provided by attackers are imperfect; some encrypted files are simply not recoverable even after payment. Sophos found that 97 percent of organizations with encrypted data did ultimately recover it — but among those who paid, significant time and operational disruption remained.
• It does not resolve the exfiltration. If data was stolen before encryption — which Sophos says happens in 75 percent of attacks — paying the ransom does not get the data back. It only removes the immediate threat of publication. The data remains in attacker hands indefinitely.
• It does not eliminate the PIPEDA reporting obligation.

The PIPEDA Reporting Obligation You Cannot Avoid

A ransomware attack that compromises personal information of Canadians is a security safeguard breach under PIPEDA, regardless of whether you pay the ransom or successfully recover your systems. If the breach poses a real risk of significant harm to affected individuals — and a ransomware event typically does — you are required to:

1. Report the breach to the Office of the Privacy Commissioner of Canada with specific details about the incident, the personal information involved, and your response steps.

2. Notify affected individuals directly so they can take protective action.

3. Maintain records of every breach — including those that do not meet the reporting threshold — for a minimum of 24 months under PIPEDA's record-keeping requirement. (Office of the Privacy Commissioner of Canada, PIPEDA Breach Reporting)

Organizations that do not have a documented incident response process face both the operational crisis of a ransomware event and the legal compliance burden simultaneously, under time pressure, without a clear playbook.

The CCCS Preparedness Framework for Canadian SMBs

The Canadian Centre for Cyber Security maintains two specific ransomware guidance documents relevant to Canadian businesses:

• ITSAP.00.099 — *Ransomware: How to Prevent and Recover* (updated February 2025): Awareness-focused guidance designed for all organization sizes
• ITSM.00.099 — *Ransomware Playbook*: Detailed incident response procedures for security teams

The CCCS framework distills to five preparation areas:

1. Offline, encrypted, tested backups. The CCCS is explicit: backups stored only on internet-connected or network-attached systems are in scope for ransomware. A 3-2-1 architecture — three copies, two different media types, one offline or offsite — with regular tested restoration is the baseline. The CCCS Ransomware Threat Outlook 2025–2027 estimates that the 336 pre-ransomware notifications issued to over 300 Canadian organizations in 2024–2025 prevented up to CA$18 million in losses — a direct measure of how much recovery costs when backup preparedness fails.

2. Consistent patch management. The majority of ransomware initial access vectors exploit known vulnerabilities with patches already available. A documented patch management process covering third-party applications, firmware, and network devices — not just operating systems — closes the most commonly exploited entry points. Unpatched VPN appliances and edge devices appear repeatedly in CCCS incident reporting.

3. Multi-factor authentication on every external-facing service. MFA on email, VPN, remote desktop, and cloud consoles stops credential-based initial access. Phishing-resistant MFA — passkeys or hardware security keys — provides stronger protection than SMS-based codes, which can be intercepted. Basic MFA on every external entry point is the minimum acceptable baseline.

4. Endpoint detection and response (EDR). EDR tools monitor endpoint behaviour and can detect ransomware precursors — lateral movement, privilege escalation, unusual file access patterns — before encryption begins. Microsoft Defender for Business, Sophos Intercept X, and Huntress MDR are all accessible at SMB price points. The organizations that contain ransomware fastest are those with behavioural detection already running, not those attempting to deploy tools after the alert fires.

5. A documented incident response plan with tested procedures. A ransomware incident unfolds under time pressure and stress. Decisions made without a plan — whether to pay, which systems to isolate, how to communicate with customers, when to engage legal counsel, how to file the PIPEDA report — are made worse by the conditions of an active incident. A documented plan, reviewed annually and exercised through tabletop testing, converts a potential business continuity crisis into a managed operational response.

A Practical Starting Checklist

If none of this is in place, work through this priority order:

The CCCS published these guidance documents because the controls work. The CA$18 million in prevented losses from 2024–2025 notifications is evidence that organizations that act on early warning — and that have recovery infrastructure in place when they receive it — have meaningfully different outcomes than those that do not.

Sources

• CIRA. *2025 Cybersecurity Survey.* cira.ca
• Canadian Centre for Cyber Security. *Ransomware Threat Outlook 2025–2027.* cyber.gc.ca
• Canadian Centre for Cyber Security. *Ransomware: How to Prevent and Recover (ITSAP.00.099), updated February 2025.* cyber.gc.ca
• Canadian Centre for Cyber Security. *National Cyber Threat Assessment 2025–2026.* cyber.gc.ca
• Verizon. *2025 Data Breach Investigations Report.* verizon.com
• Sophos. *The State of Ransomware 2025.* sophos.com
• IBM Security. *Cost of a Data Breach Report 2025 – Canada.* canada.newsroom.ibm.com
• Mandiant / Google Cloud. *M-Trends 2026.* cloud.google.com
• Statistics Canada. *Impact of Cybercrime on Canadian Businesses, 2023.* statcan.gc.ca
• Office of the Privacy Commissioner of Canada. *What you need to know about mandatory reporting of breaches of security safeguards.* priv.gc.ca

Ransomware preparedness is not a one-time project — it is an ongoing operational discipline. The controls the CCCS recommends are the same ones that determine whether an incident is a managed response or a business continuity crisis. Cloud Forces helps Canadian SMBs implement the full preparedness stack: tested backup architectures, EDR deployment, documented incident response procedures, and PIPEDA-compliant breach reporting processes. Explore our Cybersecurity services or book a free ransomware readiness assessment.