Canada’s AI Strategy Must Focus on Building Canadian AI Companies

By: Benjamin Bergen & Laurent Carbonneau

Canada is home to a generation of AI pioneers, but we missed an opportunity when AI entered into the first serious wave of commercialization.

Canadians have heard about the contributions of Geoffrey Hinton and Yoshua Bengio in developing the underlying technology, but it’s mostly American companies — OpenAI, Nvidia, Microsoft, Anthropic and others — that are generating enormous riches on a bedrock of AI research built up by the contributions of many Canadians.

So where do we go from here? CCI has been asked to participate in a national AI Strategy Task Force struck by AI and Digital Innovation Minister Evan Solomon.

With a month to report back, we’re hitting the ground running by speaking directly with Canada’s AI innovators to lay out where this country needs to put its priorities.

Canada badly needs a new approach to recapture technology leadership, harness the economic opportunities of AI, and defend our sovereignty in a turbulent world.

So CCI assembled a call among the CEOs of Canada’s fastest-growing technology companies, and put the question to them. Any Canadian AI strategy should be built on the perspective of operators who actually navigate the market realities of the innovation economy.

What we’ve heard so far from innovators is clear. Canada’s next AI strategy must have as its north star scaling the next generation of AI innovation champions and must prioritize smart policy in a small number of strategic areas.

Canada has a recognized scale-up problem. As Canadian companies are on the path to global scale, they are too often acquired by foreign companies. This is not a problem of culture or entrepreneurship. Innovators in Canada do not have the policy environment they need to scale.

But with the speed of innovation in AI, Canada has opportunities to improve our national performance for the future.

As value in AI moves away from models and towards applications, Canada needs to get ahead of the ball. The most important factor in delivering applications that users all over the world want to use will not be enormous amounts of compute but high-quality, specific data.

This is an area where governments should be creative. Creating, for example, a data trust that allows controlled access to public data sets could help Canadian companies offset the huge advantages of market scale as well as lax privacy regimes that both China and the United States currently have without compromising our rights or our values.

Public procurement of AI solutions can provide innovators with anchor customers that serve not just as a sale, but a powerful validator, as well as a way to solve public problems.

Scaling innovators also need the right kind of infrastructure. Compute and cloud capacity are important elements of the AI tech stack. Sovereign compute is the capability to manage computing infrastructure independently of other countries. As an example of threats to digital sovereignty, the US Cloud Act allows American authorities to request data controlled by American companies even if hosted abroad. When most of the world’s cloud infrastructure runs on an American backbone, this creates serious vulnerabilities.

While total self-sufficiency is not necessary, without some sovereign capability, Canadian public and private institutions run serious risks. Canada should pursue a policy of building and maintaining an “as-Canadian-as-possible” compute and cloud capability, beginning with full legal control and incorporating Canadian technologies as far as can be done across layers of the stack to serve highly sensitive needs and offer a viable commercial complement to American hyper scalers. The Canadian Infrastructure Bank, the Growth Fund and other large-scale public finance tools could be very useful in developing this.

But in speaking with our members, one of the insights that emerged is that AI strategy is just one element of what Canada really needs — a national economic plan that creates the conditions for innovators to thrive.

These areas – a competitive policy environment, sovereign infrastructure, and a focus on generating and making available public data – are what we see as early priorities for Canada’s next AI strategy.

Over the next few weeks, we’ll continue to listen and do the spadework to deliver smart, actionable recommendations to Minister Solomon and the federal government.

‍

Benjamin Bergen is President of the Council of Canadian Innovators and can be reached at benjamin@canadianinnovators.org . Laurent Carbonneau is CCI’s Director of Policy and Research and can be reached at lcarbonneau@canadianinnovators.org

‍

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.