BetaKit is ending the year with a look back at the biggest tech stories of 2025. With more to come throughout December, you can read the full series here.
Sovereignty entered the Canadian lexicon this year on the wave of a perfect storm: existential threats to the country from US President Donald Trump, and a change in political power prompted by fervent nationalism not seen in recent memory.
This modern embrace of sovereignty holds the potential to transform Canada’s tech ecosystem. But real change depends on whether the nation does the hard work to move beyond flashy, bumper-sticker nationalism.
The catalyst
Trump’s second presidential term began with the promise of tariffs on Canada. His words immediately threw domestic innovators into chaos: companies like Lightspeed and Paperplane braced for currency fluctuations, supply logistics nightmares, and market panic. The US president followed up with threats to annex Canada by economic force.
The need for control over Canadian data, cloud services, and the internet became an opportunity for domestic companies looking to capitalize.
Canadians reacted with shock, anger, and a swift change in our political opinions and consumption habits. By April, more than half of Canadians considered security and sovereignty a top priority (up from about 20 percent around a decade ago). The declaration of economic war spurred a push to buy Canadian, from grocery shelves to software—most Canadians polled in February said they were willing to pay more for a Canadian product, and a majority boycotted US goods.
Mark Carney rode that nationalist wave into Liberal Party leadership, and then the country’s top office. Under the former Bank of Canada head, the word sovereignty became a crown jewel of the feds’ innovation platform, and was mentioned more than 80 times in the 2025 budget. Carney’s cabinet, including AI minister Evan Solomon and industry minister Mélanie Joly, emphasized that securing Canada’s digital and physical sovereignty was paramount.
The realization
Canadians also began to scrutinize our supply chains more closely for American entanglement. With a volatile actor in charge in the US, Canada’s dependence on American technology—from cloud services to space launches—started to seem like more of a risk than an asset.
Reports revealed the depth of that dependence: the top three cloud service providers for businesses and government in Canada (and globally!) are Microsoft, Amazon Web Services, and Google. Only one Canadian company, ThinkOn, is authorized to sell to the government. The impact of that dependence was visible during the Amazon Web Services outage earlier this year. It knocked out large swathes of the world’s internet, hitting Canadians trying to check their Wealthsimple account or buy Jays tickets on Ticketmaster.
It’s not just a matter of reliance, but one of control. The US CLOUD Act and Patriot Act allow US law enforcement to request data stored on servers owned by US companies at any time, even if they’re in Canada. “As long as a [cloud service provider] that operates in Canada is subject to the laws of a foreign country, Canada will not have full sovereignty over its data,” one Ottawa white paper notes.
If the government was looking to deploy sovereign dollars, it was the perfect time to spend them here. But when it comes to the intangible economy, only the sales pitch is simple.
The need for control over Canadian data, cloud services, and the internet became an opportunity for domestic companies looking to capitalize. Benjamin Bergen, then the president of the Council of Canadian Innovators, called it “time to take bold action to secure our economic future.” Computing infrastructure companies ThinkOn, Hypertec, Aptum, and eStruxture banded together to build a Canadian sovereign cloud option.
The Canadian government historically hasn’t bought Canadian tech. If the government was looking to deploy sovereign dollars, it was the perfect time to spend them here. But when it comes to the intangible economy, only the sales pitch is simple.
The complication
The federal government has a tendency to flow innovation investments to foreign firms, or at least those foreign firms’ Canadian branches. That bad habit began prior to the current government. The Trudeau-era $2-billion Sovereign Compute Strategy’s first commitment was $240 million for Toronto scaleup and federal champion Cohere to buy compute capacity. But a large chunk of that money is going toward the landlord of that compute capacity: American data centre operator CoreWeave. Analysis of the deal by think tank Canadian SHIELD gave it a 2/10 Sovereignty Score.
The indiscriminate spending has continued under Carney’s Liberals. The feds’ more recent investment in Nokia Canada has also riled up Canadian tech leaders, who saw it as another example of foreign direct subsidy and branch plant access.
The problem might lie with the complexity of sovereignty itself, both in the word’s meaning and in its ease of execution. Take the new Major Projects Office, which Carney promised would build a sovereign Canadian cloud shortly after its launch. Experts have warned that an entirely ‘Canadian cloud’ would be difficult to pull off, and nearly impossible without American hardware (darn those pesky Nvidia chips).
If that is the case, then what is the value of being completely Canadian? Ottawa’s new ‘Buy Canadian’ procurement guidelines seem to indicate that if you do business in Canada, you’re Canadian enough, which reasonable people on either side of the debate can take as an understandable loophole or a complete betrayal of the national moment. If you close your eyes and listen to the wind, you might hear Minister Solomon’s oft-repeated mantra, “sovereignty is not solitude.” OK, but then what is it?
The future
These complexities need to be unravelled, not ignored, if Canada is serious about building sovereign tech capabilities. There are two policy shifts we’ll be watching. First, whether the large portion of the sovereign compute strategy that has yet to be doled out will be funnelled to Canadian companies, rather than US cloud providers. Second, whether the ‘Buy Canadian’ policy will actually equate to more Canadian procurement agreements.
As 2025 unfolded, Canadians started to think about what a world in which we built, bought, and hosted our own tech could look like. In 2026, the country will need to figure out how (and if) it can make that happen. The sovereignty wave arrived, dotted across federal policy documents, LinkedIn posts, and press releases. We’ll have to wait and see if that wave moves beyond performativity into pragmatic action.
Feature image courtesy Madison McLauclan for BetaKit.