The Canadian government’s recent budget, titled “Canada Strong,” emphasizes a commitment to strengthening national sovereignty through economic productivity and enhanced national defense, with a particular focus on artificial intelligence (AI). Prime Minister Mark Carney’s Liberal government has identified AI-heavy technologies as a key avenue for reducing operational costs while simultaneously boosting productivity, as laid out by eight federal agencies in the 2025 budget.
Significantly, many budget investments are directed toward advancing the defense industry via the creation and commercialization of dual-use technologies—products and software that serve both civilian and military purposes, which prominently includes AI. However, a pressing question arises: does “Canada Strong” adequately address the complexities and potential pitfalls associated with AI?
Historical Context of AI Funding in Canada
Historically, the Canadian government has incrementally supported AI research through various federal initiatives, such as the Federal Granting Agency, the Canada Foundation for Innovation, and the Canadian Institute for Advanced Research. Between 2006 and 2015, former Prime Minister Stephen Harper’s administration allocated over $13 billion towards science, technology, and innovation.
Under Prime Minister Justin Trudeau, the narrative surrounding AI shifted notably. The 2017 budget, titled “Building a Strong Middle Class,” marked the first time AI was explicitly recognized within a federal budget. This document characterized AI as a transformative force for the Canadian economy, emphasizing its potential to foster innovation and economic growth.
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The AI Focus in the 2025 Budget
The 2025 budget signifies a pivotal shift in Canada’s approach to AI, prioritizing adoption and productivity while emphasizing national sovereignty. However, critics argue that it underrepresents the importance of regulatory frameworks and ethical considerations surrounding AI deployment. The focus on rapid integration across various federal departments—including the Canada Revenue Agency, Employment and Social Development Canada, and Fisheries and Oceans Canada—risks overshadowing essential discussions about guardrails and ethical oversight.
As the budget promotes AI as a primary driver for economic advancement, it raises concerns about an over-reliance on foreign technologies, such as Microsoft CoPilot and NVIDIA chips, which may compromise national autonomy. Furthermore, the absence of comprehensive regulations around lethal autonomous weapons and other potentially disruptive technologies could transform Canada’s perceived AI advantage into a vulnerability.
Challenges Ahead
While the current budget framework aims to stimulate the economy through dual-use technology, it potentially neglects the pressing issues tied to AI governance. The discontinuation of the Artificial Intelligence and Data Act in 2025 has shifted the governance framework towards norms and standards rather than legal mandates. This could lead to a precarious situation where unregulated AI deployment disrupts sectors integral to Canadian democracy.
In essence, the promotion of AI as an economic boon—through both public administration automation and military applications—within a loosely regulated context stands to jeopardize critical infrastructures that underpin the nation’s democratic values. Without dedicated funding for oversight and regulation, “Canada Strong” may fail to adequately prepare for the ethical and operational challenges that proliferate with widespread AI adoption.
The implications for the future are profound, urging stakeholders and policymakers to reconsider the balance between innovation and regulation as they navigate the evolving landscape of artificial intelligence in Canada.
Read more: What are Canada’s governing Liberals going to do about AI?
