Access, Capacity and the Path to AI Compute Leadership in Canada

By: Nick Schiavo, CCI Director of Federal Affairs
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Canada’s leadership in the development of artificial intelligence is well-known. As a country, we funded and hosted groundbreaking research at our post-secondary institutions, and as a result, we still enjoy a rich pool of talent in AI research to this day.

But we can’t rest on our laurels. Complacency in AI adoption and commercialization is risking Canada’s position in the global innovation landscape, and the accompanying wealth that comes with it.

The federal government has been consulting with experts in industry and academia about how to deploy $2 billion in funding for AI compute to benefit the Canadian innovation ecosystem. However, contrary to popular belief, compute—the basic equipment required for AI model development and deployment—is not the primary challenge facing Canada’s AI sector.

Most Canadian companies do not consider compute a significant barrier to growth. Instead, the real obstacles lie in the commercialization of AI innovation and creating an ecosystem that encourages Canadian industry to adopt AI technologies.

To enhance Canada’s competitiveness, the federal government must focus the upcoming funding for AI computing infrastructure on domestic scaling firms, widespread adoption, and pathways to move from research to commercialization.

Without a thriving AI industry and widespread adoption in a broad range of applications, even Canada’s most talented researchers may seek opportunities in places  where they can find better support for their work.

One of Canada’s biggest areas for improvement is the commercialization of intellectual property (IP). Despite a 57% increase in AI patent filings in 2022-2023, 75% of the patents generated through the Pan-Canadian Artificial Intelligence Strategy are owned by foreign firms. This means that while Canadians are making great strides in research and invention, the economic benefits are being exported to other countries.

To prevent further IP loss, the government must create the right conditions for scaling AI companies, focusing on IP management and commercialization. Canadian firms should be incentivized to retain ownership of their innovations and find pathways to bring those innovations to market.

Moreover, domestic adoption of AI technologies is critical, and public sector procurement should play a significant role here.

As we have explored in great detail through CCI’s landmark research in Buying Ideas and Building Winners, government purchasing power is the most potent tool available to policymakers to drive innovation and provide a market for Canadian AI products.

While compute may not currently be the largest barrier for scaling Canadian firms, access to secure and sovereign computing resources for critical sectors like healthcare, defense, and national security is essential. Canada must balance domestic capacity with international partnerships to ensure long-term competitiveness in AI.

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Key Recommendations

To remain a leader in AI, the Council of Canadian Innovators is calling on the government to implement the following recommendations:

1. Prioritize AI commercialization and adoption across industries, particularly through government procurement policies.

2. Combine domestic demand with international partnerships to ensure access to the necessary computing power.

3. Build sovereign compute capacity to protect sensitive data and critical industries.

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The future of Canada’s AI sector depends on action. Governments, businesses, and research institutions must work together to accelerate AI adoption, create more opportunities for Canadian innovators, and turn AI research into real economic growth.

Now is the time for Canada to invest in AI and the knock-on benefits it will provide to the country’s prosperity. The federal government must act decisively to ensure we can commercialize AI innovations, scale homegrown companies, leverage procurement to deliver for Canadians and secure the digital infrastructure that will safeguard our future competitiveness.

But as a country, we must take a strategic approach that encompasses all of the factors that will lead to a thriving domestic artificial intelligence sector. If we don’t create the conditions needed to leverage AI, Canadians will miss out on the potential for enormous growth in this technology and our economy will continue to fall further behind.

Developing an effective AI Compute Access Fund and AI Sovereign Compute Strategy will drive much-needed economic growth, help us solve key challenges, and make Canada the leader in AI computing that it should be.

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Media Contact:

Nick Schiavo
Director of Federal Affairs
nschiavo@canadianinnovators.org

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About the Council of Canadian Innovators

The Council of Canadian Innovators is a national member-based organization reshaping how governments across Canada think about innovation policy, and supporting homegrown scale-ups to drive prosperity. Established in 2015, CCI represents and works with over 150 of Canada’s fastest-growing technology companies. Our members are the CEOs, founders, and top senior executives behind some of Canada’s most successful ‘scale-up’ companies. All our members are job and wealth creators, investors, philanthropists, and experts in their fields of health tech, cleantech, fintech, cybersecurity, AI and digital transformation. Companies in our portfolio are market leaders in their verticals, commercialize their technologies in over 190 countries, and generate between $10M-$750M in annual recurring revenue. We advocate on their behalf for government strategies that increase their access to skilled talent, strategic capital, and new customers, as well as expanded freedom to operate for their global pursuits of scale.