- Canadian businesses are losing CA$6.98 million on average to data breaches, with impacts trickling down to consumers.
- Shadow AI is driving up risks, adding CA$308,000 per breach for Canadian businesses and increasing the likelihood of sensitive data exposure.
- Adopting security AI and automation extensively reduced breach costs to CA$5.19 million, compared to CA$8.53 million for those organizations not using these technologies.
MARKHAM, ON, July 30, 2025 /PRNewswire/ — Data breaches in Canada are becoming more costly and complex, with organizations paying an average of CA$6.98 million per breach in 2025, according to the latest IBM Cost of a Data Breach Report. This represents a 10.4% increase from CA$6.32 million in 2024, reflecting the growing financial impact of security incidents. Among the report’s findings is the rise of unsanctioned AI– known as Shadow AI – which amplify risks, escalate costs, and expose sensitive consumer data. Often introduced by employees using unapproved AI systems, shadow AI creates vulnerabilities and compliance issues for businesses.
The report emphasizes the critical role of security AI and automation in reducing breach costs and improving detection efficiency. Organizations extensively using security AI and autonomation report average breach costs of CA$5.19 million, compared to CA$8.53 million for those not using these tools. Additionally, these technologies helped organizations achieve faster detection and containment, shortening breach lifecycles by 59 days for those using them extensively.
“Cybersecurity isn’t just about protecting data — it is about protecting your business’s bottom line and reputation,” said Daina Proctor, Security Delivery Leader, IBM Canada. “This report shows that organizations using AI and automation are saving millions and detecting breaches much faster, but gaps in AI security and governance, like the use of shadow AI, are leaving businesses exposed to unnecessary risks. By investing in AI tools and building clear AI policies, companies can take control of their security and stay ahead of emerging threats.”
Key Findings in Canada for 2025
- Overexposed AI: One in three Canadian businesses reported not having access controls on AI systems, positioning them as easy, high-value targets.
- Shadow AI Risks: The use of shadow AI was also found to be a top breach cost driver for Canadian businesses, with breaches involving shadow AI increasing costs by $308,000.
- Phishing Scams: The most common initial attack vector, phishing scams cost Canadian organizations an average of CA$7.91 million per breach, a 24% increase from CA$6.38 million in 2024.
- Industry Impacts:
- The financial sector leads breach costs at CA$9.97 million in 2025, a 7.4% increase from CA$9.28 million in 2024, reflecting the high sensitivity and value of financial data.
- Pharmaceutical breaches cost CA$7.99 million, incidents across this sector have the potential to expose intellectual property and delay treatments by impacting supply.
- Breaches in the industrial sectors cost an average of CA$8.39 million, as these organizations have a low tolerance for downtime, making them easy targets for attackers.
How AI is Transforming Cybersecurity Operations
The report highlights that organizations extensively adopting AI and automation across their security operations centre (SOC) see significant financial benefits. AI tools automate manual cybersecurity tasks, including across threat detection and response, allowing security teams to focus on higher-priority initiatives.
Security automation accelerates response times and reduces the impact of breaches. Organizations using these tools extensively reported faster breach identification, with the Mean Time to Identify (MTTI) reduced to 118 days, compared to 162 days for organizations not using these technologies.
What It Means for Canadians
Data breaches are not just a corporate issue – they affect everyone. When organizations lose millions to cyberattacks, it impacts Canadians through:
- Higher Costs for Goods and Services: Businesses often pass on breach costs to consumers by increasing the prices of their goods or services.
- Stolen Personal Data: Breaches frequently expose personal information, including banking details, health records, and more.
- Service Disruptions: Breaches can lead to delays in shipments, cancelled appointments, and interruptions in critical services.
Recommendations for Canadian Businesses
- Govern and Secure AI Systems: Develop policies to manage the use of AI, prevent shadow AI, and ensure compliance with privacy laws.
- Invest in Security Automation: Use AI tools to detect and contain breaches faster.
- Connect security for AI and governance for AI: Investing in integrated security and governance software can help organizations automatically discover and govern shadow AI.
- Expand Employee Training: Strengthen security awareness programs to minimize human error.
Additional sources:
- Download a copy of the 2025 Cost of a Data Breach Report to learn more.
- Sign up for the 2025 IBM Cost of a Data Breach webinar on Wednesday, August 13, 2025, at 11:00 a.m. ET.
- Read more about the report’s top findings in this IBM blog.
