Key takeaways:
- The document is an industrial strategy for fostering domestic AI champions, expanding access to compute, leveraging AI for health research, and training workers to use these new tools.
- There are nods to regulation, but nothing that wasn’t already being discussed in the prior Parliament. Privacy legislation and the online harms bill are coming, but not before the House of Commons rises for the summer.
- Out of the $7.8 billion committed to the strategy, roughly $1 billion is new and will require additional authorities from Parliament.
- The Canada Strong and Free Fund is investing half a billion dollars into Canadian AI firms in exchange for equity.
—
The long-awaited Canadian AI strategy has arrived. Last October, Canada’s AI Minister Evan Solomon launched a public consultation and AI task force with the goal of developing a whole-of-government approach to confront the challenges and opportunities presented by the rapid advancement of AI technologies. Their stated goals were to:
- Accelerate the safe adoption of AI across the economy and public services
- Scale Canadian AI champions and attract investment
- Strengthen sovereign infrastructure (compute, data, cloud)
- Build public trust, skills and safety
That consultation drew 11,300 participants, and the AI task force produced 32 separate reports. Today’s AI strategy is a reflection of those inputs.
While the strategy outlines a litany of programs and policies intended to advance those goals, much of the funding and programmatic foundation was laid in Budgets 2024, 2025 and the 2026 Spring Economic Update. Below is an overview of everything that was announced:
| Program | Amount | Where does the funding come from |
| Regional AI Initiative (expansion) | $500M | New |
| AI Missions Program (health, 1st mission) | $200M | New |
| Health Sector Data Space (CIHI) | $100M | New |
| VITAL health-data expansion | $100M | New |
| Creative Technology Program | $50M | New |
| Canadian Tech Growth Fund | $500M | Canada Strong Fund (Spring Economic Update) |
| LIFT (SME AI financing) | $500M | Existing BDC financing |
| Compute Access Fund (expansion) | $700M | Budget 2024 — part of the $2B Sovereign Compute Strategy |
| AI Institutes commercialization (Founders-in-Residence) | $130M | Budget 2024 |
| AI Safety Institute (CAISI) | $50M | Budget 2024 |
| Talent attraction strategy | $1.7B | Budget 2025 |
| Venture-capital commitments | $1.75B | Budget 2025 |
| Elevate IP / IP Assist | $159M | Budget 2025 |
| Job Bank modernization | $50M | Budget 2025 |
| SR&ED + Productivity Super-Deduction | uncosted | Budget 2025 (tax measures) |
| CanCode | $30M | Funding extension of a program that has existed since 2017. |
| Amii AI Pathways | $9M | Old announcement, flowing from a program funded in Budget 2023 |
Where is the new money going?
Regional AI Initiative – $500 million expansion (Link)
Created in Budget 2024 with an initial outlay of $300 million, the Regional AI initiative is a program designed to help SMEs and non-profit organizations adopt and integrate AI into their operations. The program extends interest-free loans to businesses and grants to non-profit organizations.
Loans/grants tend to be to the $50,000-$125,000 range, so the additional $500 million has the potential to benefit tens of thousands of organizations.
Aside from helping recipients adopt these tools, this program is seeking to grow the domestic market for AI firms operating in Canada.
AI Missions Program (Health) – $200 million
A brand-new program, this is being positioned as a “moonshot” type program, where funds will be distributed to researchers, companies and health authorities to solve pressing problems related to Canadian healthcare delivery. It aims to:
- Expand access to primary care
- Reduce ER wait times
- Prevent avoidable visits through better upstream care
- Reducing administrative burdens on healthcare professionals
The particulars of this program are still vague. We don’t have a lead agency, funding criteria or timeline. Given that the program is unfunded, we expect to see more details in Budget 2026 this fall.
VITAL health-data expansion – $100 million (Link)
Built on top of an Ontario program named the General Medicine Inpatient Initiative (GEMINI), which was stood up in 2017 by the Ontario provincial government. In Budget 2024, the Canadian government invested $30 million to build out the platform, laying the groundwork for a national expansion. That money:
….goes to VITAL (St. Michael’s / Unity Health Toronto) to build the federated infrastructure connecting provincial hospital systems, in order to accelerate clinical trials… and advance medical AI through responsible use of health data from Canada’s diverse population. (Link)
One study claimed that the programs developed from this research saved 50,000 bed days and avoided $51 million in costs at 21 Ontario hospitals between 2022-2024.
This additional $100 million will be made available to the provinces to adopt the VITAL platform for use in their own healthcare systems.
Creative Technology Program – $50 Million
Described in the strategy as a program to “support Canadian creators in using AI on their own terms.” There are no other details included in the strategy.
Reading between the (very few) lines, these funds could be administered by TeleFilm Canada, or one of the other granting vehicles overseen by Heritage Canada.
Given the backlash against AI from filmmakers, musicians and artists, this program is likely to be controversial.
Not new money, but new details
Canadian Tech Growth Fund – $500 Million from the Canada Strong Fund (Link)
In terms of dollars, the most significant announcement in this strategy is the announcement that the Canada Strong Fund will acquire as much as $500 million in equity from Canadian AI companies. The strategy says that the fund will:
…. help close the scale-up capital gap facing Canada’s most promising AI companies. The Fund will provide flexible growth capital and investment support, and enable the federal government, at times, to take equity stakes in the most promising Canadian AI firms. This will help them attract private capital, compete globally, retain talent and intellectual property, and remain anchored in Canada. Where appropriate, Canada will leverage its recently announced Sovereign Wealth Fund to further support emerging national champions.
When Canadian AI companies are doing equity fundraising, they will soon have the opportunity to include the Government of Canada on their cap sheet. These investments are designed to mobilize private capital, providing confidence that the Government of Canada is backing the company.
No surprise legislative initiatives announced
The document promises “new consumer privacy legislation, online safety law modernization, legal tools against deepfakes, election integrity protections and a continued privacy act review.”
An update to PIPEDA and another attempt at Online Harms legislation were expected by most industry stakeholders this spring but never materialized. All signs lean toward the introduction of these bills sometime in the fall sitting. The act that sets rules for how the Government deals with private data, the Privacy Act is in mid-consultation and is likely to land in early 2027.
The document does not convey any urgency regarding the broad regulation of AI, so it is unlikely that the government intends to reintroduce the Artificial Intelligence and Data Act (AIDA), which sank Bill C-27 in the previous Parliament.
What’s next?
Expect Minister Solomon to spend the summer providing additional detail on many of these initiatives. There will be plenty of opportunities for formal and informal consultations on the programs that have yet to be stood up.
Given the fluidity of public opinion on matters relating to AI, it is quite possible that the government’s posture on some of these policies could shift in the coming months. Watch this space.
Counsel will have additional commentary and analysis on the AI strategy in the coming days. If you have questions, comments, or want to discuss opportunities created by the AI Strategy, please reach out to Ben Parsons via email.