Canada is behind in the global artificial intelligence race. But the solution is not to create more reports or task forces. It is to act—starting with practical, immediate use cases.
We already have examples to work from. Health-care providers are using AI to reduce diagnostic error rates and streamline clinical trials. Construction firms are using AI to cut material waste and track project delays. Manufacturers are applying machine learning to improve throughput and spot quality issues before they hit the line. AI is already reshaping the productivity frontier.
The question is not whether Canada can do it. It’s whether we will. Because while these bright spots exist, they remain the exception. Most firms are stuck in pilot purgatory—unsure how to start and scale ambitious AI projects. Our government, policy, and institutions have a strong role to play here. But our business leaders must also make big investments, or risk being left behind in the global competition to improve productivity.
Leaders must ask not only “What are the risks of AI?” but also “What is the cost of doing nothing?” Every firm and institution should begin quantifying their AI adoption gap and what that delay is costing.
The adoption problem
What’s holding us back is not talent. Canada still punches above its weight in AI research, and we’ve seeded some of the best AI engineers and companies in the world. However, the deeper problem is that we haven’t designed a national strategy that matches the reality of how AI is adopted and used. We’ve built centres of excellence without a national delivery model.
That’s no longer good enough.
Canada must become a place where AI is used. That means focusing on adoption in the sectors where we already have strengths: natural resources and mining, health, construction, advanced manufacturing, and enterprise technology. It means working with firms of all sizes—not just the Fortune 500—to ensure AI isn’t a luxury for the few but a productivity driver for the many, including SMEs.
In 2025, only 12 percent of Canadian firms reported using AI. We lag the OECD average. Many firm leaders cite challenges in knowing how to begin, access to sufficient AI compute capacity, or buy-in from senior executives to move ahead. Only a quarter of Canadians have any training in AI. We must close a national AI adoption and AI literacy gap to meet the moment.
Another challenge: Canada’s AI policies—across regulation, innovation, and infrastructure—are fragmented across multiple ministries, agencies, and jurisdictions. Our regulations remain unclear while our peers in the U.S., the U.K., Europe, China, South Korea, and Singapore are already providing clarity to innovators. Our hundreds of programs for innovation and business support across multiple departments lack coherence and often can be slow or ineffective. And we continue to treat AI compute infrastructure as a research investment rather than as the essential utility it has become.
Time for a course correction
Canada now has an opportunity to correct course. The federal government’s $2 billion Sovereign AI Compute Strategy is a welcome start, although insufficient in size and speed of allocation. Alberta’s data centre strategy is ambitious—although if not carefully managed, it risks only attracting investment into foreign-owned infrastructure. We need strategies that accelerate our economy while also enabling Canadian-owned innovation and sovereign infrastructure.
On AI literacy, our national AI institutes and partner organizations have developed AI resources and curriculum that can be used and deployed by ministries of education and our post-secondary institutions. We must move quickly to ensure that Canadians and our future workforce are equipped for this new era.
Data is the third pillar. Canada’s data systems are fractured. We need national standards for interoperability, incentives for legacy modernization, and support for shared data platforms. Health care offers a compelling case study of what’s possible when data systems are integrated. St. Michael’s Hospital in Toronto now hosts the GEMINI data platform, which, after painstaking work and data integration, has more than 60 percent coverage of Ontario and is used by more than 1,000 clinicians, health system leaders, and researchers. The system has enabled AI-driven clinical trials at a fraction of the usual cost—a promising model for data-sharing in other domains.
Ultimately, the challenge is execution. We need a clear national roadmap that ties investment in infrastructure and programs to outcomes in innovation and adoption. That roadmap must include targets for key sectors, programs that help firms integrate AI into core operations, and trusted spaces for testing new tools in live environments.
A recent RBC report, “Bridging the Imagination Gap,” outlines how firms across the country are trying to adopt AI but often lack the vision or support to scale. The report highlights an “imagination gap”—a persistent underestimation of what AI can do. This is especially true among small and mid-sized enterprises that make up the bulk of Canada’s economy.
Government can help close that gap by procuring Canadian AI solutions and de-risking first-mover use cases, partnering on public AI tools and data sets, and making clear regulations. But ultimately, the private sector must lead—and take calculated risks.
There is no one model for success. But there is a pattern. The countries pulling ahead—such as the U.S., U.K., China, and the Gulf States—are doing three things well: investing in domestic AI infrastructure and AI literacy; providing a clear, innovation-friendly regulatory environment; and creating the conditions for private sector investment. Canada can and must do the same.
AI has no borders. But competitiveness does. Our allies and competitors are not waiting. Canada has the research, the talent, and the early success stories. What we need now is belief—a shared conviction that AI can be a strategic advantage, not just a scientific achievement.
The payoff is not abstract. It’s growth, productivity, and global competitiveness. AI adoption is not a silver bullet, but it is a big lever—and one we can still pull.
But the world will not wait for Canada.
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