Canadian tech execs like the direction of the new $2.3 billion AI plan, but say it's lacking

Technology executives and business groups say Canada’s updated national artificial intelligence strategy released on Thursday after a five-month delay is a step in the right direction, but they want more details on how the earmarked $2.3 billion will help companies secure contracts and scale into globally competitive players.

The AI for All strategy includes measures designed to spur business adoption of AI, back high-potential AI companies and expand the infrastructure buildout, something business leaders have long called for. It also outlines funding and programs for literacy, skills training and AI-related job creation amid low levels of public trust in the tech.

Prime Minister Mark Carney said the plan will spur $200 billion in economic growth and create 250,000 new AI-related jobs in the next five years.

Still, “the biggest risk is that Canada builds a pile of AI programs instead of an AI ecosystem,” said Avery Pennarun, co-founder and chief executive of Toronto’s Tailscale Inc., which provides virtual private networks for AI companies. “We can fund research, announce compute and create new investment vehicles, but if Canadian buyers will not be early customers for Canadian companies, those companies will go where the first serious customers are.”

Laurent Carbonneau, vice-president of policy and advocacy at the tech lobbyist Canadian Council of Innovators, said the strategy contains “promising measures,” but lacks a clear and focused blueprint to help homegrown companies scale up and risks spreading itself too thin by supporting too many programs.

Ottawa has repeatedly said it wants to create and support more tech champions such as Toronto AI startup Cohere Inc., which is Canada’s only AI model developer. To that end, the government will launch a $500-million Canadian Tech Growth Fund that offers financing for high-potential companies in exchange for potentially taking equity stakes in the companies.

Louis Têtu, executive chair of Coveo Solutions Inc., which makes AI search products for businesses, said the support for startups is good, but helping scale-ups is better, and that AI companies need contracts, not subsidies.

Ottawa said it is committed to fast-tracking homegrown procurement and it will serve as a “strategic anchor customer” via its Buy Canadian policy to support homegrown companies, but did not provide further details in the strategy.

Taleeb Noormohamed, parliamentary secretary to AI and Digital Innovation Minister Evan Solomon, pointed to the government’s purchase of 1,400 AI licences from Cohere as a first example of how the government will buy Canadian.

Coveo signed an agreement with Ottawa last year that will potentially see the government buy its tech for use in public services. Têtu said 95 per cent of Coveo’s revenue comes from private- and public-sector clients outside Canada.

Pennarun said Canada should be buying, funding and holding its own “winners,” but added that a growth fund can only help if it addresses core issues, such as currently slow-moving and conservative Canadian capital and looking beyond frontier model developers for champions.