Canada aims to increase its economic productivity by stimulating commercialization and adoption through its new national AI strategy. However, the strategy offers few details on privacy protections or how the sector will be regulated.
The strategy, titled AI for All, was announced by Prime Minister Mark Carney on Thursday morning at Toronto General Hospital. Carney said the strategy is intended to help Canada foster trust, provide opportunity, and safeguard sovereignty as AI becomes part of daily life.
The strategy says the government will explore mechanisms to “encourage Canadians to reinvest gains earned from successful tech companies into new Canadian AI startups.”
“The question isn’t whether AI will transform our lives: it will,” Carney told the media. “The question is, will it improve the lives of all Canadians or benefit only a few?”
Some of the content of the AI strategy, including a proposal to establish a $500-million Canadian Tech Growth Fund, was first reported by CBC News earlier this week. The strategy details that the fund will provide growth capital, investment support, and occasional federal equity investment in Canadian AI firms. A senior government official told reporters ahead of the strategy’s release that more details on the fund will be revealed in the coming months.
The strategy also says the Department of Finance will explore mechanisms that “encourage Canadians to reinvest gains earned from successful tech companies into new Canadian AI startups” by the 2026 budget, expected this fall.
Ben Bergen, CEO of the Canadian Venture Capital & Private Equity Association, said in a statement to BetaKit that Canada’s private capital industry “welcomes the ambition behind this strategy.”
“Done right, these measures can crowd in domestic private investment and help more of Canada’s best companies scale and succeed from here, while keeping more wealth and prosperity at home,” Bergen said.
The strategy also commits to topping up funding for several existing programs, including $50 million for the Canadian AI Safety Institute, another $500 million for the Regional Artificial Intelligence Initiative, and an additional $700 million for the Compute Access Fund.
It also commits to safety through eventual new consumer privacy legislation, online privacy laws, and the creation of a “Canada Trusted AI Certification program” to help Canadians identify trustworthy AI products in the marketplace. While no details on those regulations were included in the strategy, Carney said following Thursday’s announcement that more information would be released in the coming weeks.
The strategy’s goals include creating up to 90,000 AI-related jobs and work opportunities for young Canadians, supporting the creation of up to 250,000 new jobs through AI adoption by 2031, and unlocking a three-percent ($200-billion) increase in GDP from increased labour productivity. It says this will be achieved through programs like the Student Work Placement Program, Canada Summer Jobs, and a new National AI Literacy Initiative that will make entry-level AI training accessible to all Canadians.
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The senior government official said most of the strategy’s outcomes are expected to be achieved by 2031. One exception is its goal of increasing Canada’s business adoption of AI from 12 percent to 60 percent by 2034.
“The speed and scale of this transformation bring both promise and uncertainty about how AI will affect our jobs, privacy, security, and the institutions we rely on,” the strategy reads. “For Canada to thrive in the era of AI, Canadians need to trust in its promise.”
The AI strategy is built on the six pillars first revealed in the Spring Economic Update back in April. The pillars focus on protecting Canadians, empowering Canadians with AI training, increasing AI adoption, building sovereignty, scaling Canadian champions, and helping Canadian companies access global markets.
The strategy also outlines five “priority sectors” to concentrate investment where Canada can “build and hold a global leadership position.” These sectors include health and life sciences, energy and natural resources, transportation, agriculture, and manufacturing and robotics.
The strategy also says the government will support creating the associated compute capacity by crowding in private capital to build large‑scale AI data centres that can scale to at least 100 megawatts. The partnerships currently being finalized will provide 850MW of compute capacity by 2030, according to the strategy, with potential to scale capacity of up to 2.3 gigawatts.
A path to commercialization
The long-delayed strategy, spearheaded by AI Minister Evan Solomon, was originally slated to be released before the end of last year, following a 30-day consultation sprint in October. BetaKit’s analysis of the consultations showed that Canadians were concerned about both ethical governance and spurring economic growth. Consulted business leaders said at the time that Canada lags in commercialization and lacks the domestic computing capacity and capital to harness the full potential of the technology.
Daniel Wigdor, co-founder and CEO of Canadian AI venture studio AXL, told BetaKit ahead of the strategy’s release that Canada’s biggest challenge is that it has “world-class AI research without a clear path to commercialization.”
Daniel Wigdor,
“If we get that balance right—commercialization, application, and trust—Canada can create the next generation of global AI companies instead of exporting another generation of breakthroughs.”
AXL
“If we get that balance right—commercialization, application, and trust—Canada can create the next generation of global AI companies instead of exporting another generation of breakthroughs,” Wigdor said.
The AI strategy is attempting to address those concerns by investing $130 million for commercialization programs across the National AI Institutes, like Vector, Mila, and Amii. Canada will also use the newly created Sovereign Wealth Fund “to further support emerging national champions.”
The strategy’s focus on creating and scaling up Canadian champions follows Solomon’s remarks at BetaKit’s Most Ambitious: Town Hall last week, where he said he’s more worried about creating unicorns than monopolies.
Not all AI companies are excited by this approach, however. On a panel at All In Talks last week, Arteria AI co-founder and CEO Shelby Austin said that Canada should “let the market decide who’s going to be successful.” Clio CEO Jack Newton has made similar comments.
Still, the strategy seeks to bring AI technology into the government, which will act as a “strategic anchor customer” under the Buy Canadian Policy to help domestic AI firms scale up. Canada will also launch a Prime Minister’s Innovation Fellows Program to recruit technical talent that can help deploy AI systems within the government. However, those systems “will have to perform equally well in both official languages.”
While focusing on commercialization, the strategy also commits to expanding the Canadian Institute for Advanced Research (CIFAR) AI Chairs program from 130 to nearly 200 researchers. CIFAR provides the researchers with long-term, dedicated funding to support training and research in AI and machine learning.
Safety and equity
The strategy also commits Canada to working on AI transparency, including the watermarking of AI-generated content, but doesn’t provide much detail on how this would be mandated or achieved.
According to the International AI Safety Report earlier this year, AI-powered fraud, scams, and cyberattacks are on the rise, as AI has proven increasingly adept at discovering software vulnerabilities and writing malicious code. The strategy says Canada will work with frontier AI companies and international partners to protect itself from the threat of advanced AI systems.
While Solomon told a Queertech breakfast back in April that Canada’s AI regulation will be “airtight” on bias, racism, and hate, the strategy doesn’t provide much more insight into how. It only notes that updated laws and standards will “protect vulnerable groups from online violence and algorithmic biases.” The strategy also says it will support and amplify Indigenous-led AI initiatives.
Following Solomon’s commitment to hear input from labour leaders, the strategy promises to launch six sector-specific “Workforce Alliances” meant to identify skills gaps and align public-private investment with workforce transformation needs across essential economic sectors.
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Other programs in the strategy include a $50-million Creative Technology Program to support Canadian creators in “using AI on their own terms,” as well as a new AI Missions Program for “high-impact projects that deliver significant public good.” The latter’s first mission will commit $200 million to improving health outcomes for Canadians.
The strategy also notes that Canada is positioned to lead an alliance of aligned democracies on AI. When asked on Thursday if that alliance could offer a credible alternative to US big tech, Carney said he believes there is room to develop “critical mass” in focused areas, like building up strong LLM companies; indirectly referencing Canada’s Cohere, which recently announced its intention to acquire Germany’s Aleph Alpha.
“I don’t view this necessarily as a winner-take-all, or a challenge, strategy,” Carney said, adding that he sees a number of countries that share Canada’s values and could be natural partners for the development of this industry.
Council for Canadian Innovators (CCI) CEO Patrick Searle told BetaKit ahead of the strategy’s release that the real test will be whether the strategy is focused on building globally competitive Canadian AI companies, or whether it “tries to do too many things at once.”
“We do not need to throw everything at the wall,” Searle said. “We need an economic strategy that helps Canadian firms grow, compete globally, and capture more of the value created by AI here at home.”
The strategy concludes by conceding that “AI is moving faster than any strategy can anticipate,” and that the Government of Canada will continue to review and update its plan “to address the evolving opportunities and challenges presented by AI.”
Feature image courtesy University Health Network via X.