Prime Minister Mark Carney’s inaugural budget plan suggests allocating more than $1 billion over the next five years to bolster Canada’s artificial intelligence and quantum computing ecosystems, while integrating AI technology more extensively into federal government functions. Finance Minister François-Philippe Champagne tabled the 2025 budget on Tuesday, proposing $925.6 million over the next five years to establish a substantial “sovereign” public AI infrastructure. Of this amount, $800 million will be sourced from funds earmarked in the previous federal budget, which had announced a total of $2 billion to enhance domestic AI compute capacity and construct public supercomputing infrastructure. These funds will now be utilized to enhance AI compute availability, facilitate access to sovereign AI compute capacity for both public and private research, and ensure Canada’s competitiveness in a secure and sovereign environment.
Since assuming office, Carney has advocated for Canada to embrace AI technology and establish a sovereign Canadian cloud to safeguard sensitive data under Canadian jurisdiction. In the quantum realm, the federal government plans to allocate $334.3 million over five years to various government departments and agencies to support the establishment of quantum technology companies in Canada and foster the adoption of the technology in defense-related sectors. This funding will be channeled through the Defence Industrial Strategy, which is still pending delivery by Carney’s administration, expected no earlier than later this year.
Additionally, the budget includes several smaller AI initiatives, such as AI Minister Evan Solomon collaborating with industry to identify promising AI infrastructure projects and entering into memoranda of understanding (MOUs) with these projects. The government has already signed at least one MOU with a Canadian AI company. Carney’s government remains open to considering the provision of new AI incentives and support, with plans to develop a new AI strategy by the end of this year.
The 2025 budget also outlines measures for embedding AI technology within federal government operations to enhance productivity and service delivery. Ottawa intends to establish an Office of Digital Transformation to proactively identify, implement, and scale technology solutions across the federal government, providing domestic innovators with significant opportunities. Shared Services Canada, in conjunction with the Department of National Defence and the Communications Security Establishment, will develop a made-in-Canada AI tool for government-wide deployment, partnering with leading Canadian AI firms for its development. Some departments and agencies have identified ways to leverage AI technology to achieve cost savings by streamlining workflows, reducing manual efforts, and optimizing service delivery. Additionally, the budget proposes allocating $25 million over six years to Statistics Canada to implement the Artificial Intelligence and Technology Measurement Program (TechStat) to assess AI usage by organizations and its societal impact in Canada.