Prime Minister Mark Carney’s inaugural budget includes a plan to invest over $1 billion in the next five years to bolster Canada’s artificial intelligence (AI) and quantum computing sectors, alongside integrating AI more extensively into federal government functions. Finance Minister François-Philippe Champagne presented the 2025 budget on Tuesday, proposing to allocate $925.6 million over the next five years to establish a significant “sovereign” public AI infrastructure. The budget details that $800 million of this investment will be sourced from funds previously earmarked in the last federal budget, which had allocated a total of $2 billion to enhance domestic AI computing capabilities and construct public supercomputing infrastructure.
The allocated funds will be utilized to enhance AI computing accessibility, facilitate access to sovereign AI computing capacity for both public and private research, and ensure Canada’s competitiveness in a secure and sovereign setting. Since assuming office, Carney has advocated for Canada to embrace AI technology and develop a sovereign Canadian cloud to safeguard sensitive data within the country’s jurisdiction, subject to Canadian laws.
Regarding quantum technology, the federal government is proposing to invest $334.3 million over five years across various government departments and agencies to anchor quantum technology firms in Canada and pave the way for its adoption in defense-related sectors and industries. This funding will be channeled through the Defence Industrial Strategy, which Carney’s administration has yet to unveil, with expectations for its release at the earliest later this year.
While quantum computing offers significantly faster task completion compared to traditional computing methods, it remains largely experimental. Additionally, the budget outlines several smaller AI initiatives, including collaboration between AI Minister Evan Solomon and industry stakeholders to identify promising AI infrastructure projects and establish memoranda of understanding (MOUs) with these initiatives. Furthermore, the government has already entered into at least one MOU with a Canadian AI company to explore deploying AI technology to enhance public services and bolster the country’s commercial AI capacities.
Carney’s government is open to considering additional AI incentives and support measures, with plans to develop a new AI strategy by year-end, although the exact timing of its presentation remains unspecified. The 2025 budget also highlights the federal government’s intention to embed AI technology within its operations to boost productivity and enhance services. Ottawa aims to establish an Office of Digital Transformation to proactively identify, implement, and scale technology solutions throughout the federal government, presenting a significant opportunity for local innovators.
Moreover, Shared Services Canada (SSC), in collaboration with the Department of National Defence and the Communications Security Establishment, will develop a made-in-Canada AI tool to be deployed across federal agencies, partnering with leading Canadian AI firms for its development. Various departments and agencies have identified opportunities to leverage AI technology to achieve savings by streamlining workflows, reducing manual efforts, and optimizing service delivery. The Department of Justice, for instance, plans to integrate AI, advanced analytics, and automation tools to streamline tasks, while Transport Canada aims to utilize AI and automation to reduce costs associated with repetitive tasks.
The budget also proposes allocating $25 million over six years, starting this year, to Statistics Canada to implement the Artificial Intelligence and Technology Measurement Program (TechStat), which will utilize data to assess organizations’ utilization of AI and its impact on Canadian society.
