Canadian federal budget dedicates more than $1B to boost AI and quantum computing
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Prime Minister Mark Carney’s first budget proposes to provide more than $1 billion over the next five years to build Canada’s artificial intelligence and quantum computing ecosystem while more deeply incorporating AI technology into the operations of the federal government.
The federal government proposes to provide $925.6 million over the next five years to support large-scale “sovereign” public AI infrastructure, according to the 2025 budget presented by Finance Minister François-Philippe Champagne on Tuesday afternoon.
According to the budget, $800 million of the $925.6 million investment will come from funds set aside by the previous federal budget, which A total of $2 billion announced Boost domestic AI computing capacity and build public supercomputing infrastructure.
That money will now be spent to “promote AI compute availability and support access to sovereign AI compute capacity for public and private research” and ensure that Canada can “compete globally in a secure and sovereign environment.”
Since coming to office, Carney has pressed Canada to embrace AI technology and build a sovereign Canadian cloud, which would better protect Canadians’ sensitive data because it would remain within the country and be subject to Canadian laws.
Artificial Intelligence Minister Evan Solomon explains how his new expert panel’s ’30-day sprint’ towards an updated AI strategy hopes to keep companies and jobs in Canada despite hundreds of billions of dollars of investment from China and Silicon Valley. Solomon argues that Canada is ‘starting from an incredibly advanced position’ in the industry, but also says the country has an ‘adoption problem’ with AI.
On quantum, the federal government is proposing to provide $334.3 million over five years to various government departments and agencies to “support quantum technology companies in Canada” and provide pathways for the adoption of the technology in defence-related applications and industries.
That money will come through the Defense Industrial Strategy, which Carney’s government has yet to deliver. The strategy is not expected until the end of this year at the earliest.
Quantum computing can complete tasks at far greater speeds than traditional computing, but it is still largely experimental.
The budget also announced some other smaller AI initiatives, including AI Minister Ivan Solomon working with industry to identify promising AI infrastructure projects and enter into memoranda of understanding (MOUs) with those projects.
The federal government has already signed at least one MoU with a Canada-based AI company. Last August, Ottawa announced its Partner with Cohear to explore ways to deploy AI technology To enhance public service and build Canada’s commercial AI capabilities.
Carney’s government is also leaving the door open to considering whether new AI incentives and supports should be provided. The budget said Canada will “develop a new AI strategy” by the end of this year, though it did not specify whether it would be presented at that time.
AI and federal government operations
The 2025 budget also outlines a number of ways the federal government intends to incorporate AI technology into its own operations to “increase productivity and improve services.”
The budget states that Ottawa intends to establish a digital transformation office “that will proactively identify, implement and scale technology solutions across the federal government – a generational opportunity for domestic innovators.”
Generators It takes a huge amount of energy to power AI. CBC’s Rebecca Zandbergen heads to the Nepean-based data centre, where servers run faster to power the technology. He spoke to the founder of ThinkOne to learn what it takes to cool all those servers and about responsible AI and power grids.
“The office will identify and eliminate redundant and regressive procurement regulations as well as leverage expertise from internal sources and the private sector to accelerate AI adoption,” it said.
Shared Services Canada (SSC), in partnership with the Department of National Defense and the Communications Security Establishment, will also develop a made-in-Canada AI tool that will be deployed across the federal government.
According to the budget, SSC will partner with leading Canadian AI companies to develop internal tools.
The budget also details how some departments and agencies have identified ways to use AI technology “to achieve savings by streamlining workflows, reducing manual effort and optimizing service delivery”.
For example, the Justice Department will integrate AI, advanced analytics, and automation tools to streamline operations. Meanwhile, Transport Canada will use AI and automation to reduce the cost of dedicated resources assigned to repetitive tasks.
Ottawa is also proposing to allocate $25 million over six years from this year to Statistics Canada to implement the Artificial Intelligence and Technology Measurement Program (TechStat), which will use data to measure how AI is being used by organizations and understand the impact of the technology on Canadian society.
