Prime Minister Mark Carney's first budget proposes spending more than $1 billion over the next five years to build Canada's artificial intelligence and quantum computing ecosystem, as well as deeper embedding of AI technologies into federal government operations.
According to the 2025 budget presented Tuesday afternoon by Finance Minister Francois-Philippe Champagne, the federal government is proposing to spend $925.6 million over the next five years to support large-scale “sovereign” government artificial intelligence infrastructure.
According to the budget, $800 million of the $925.6 million investment will come from funds set aside in the latest federal budget, which announced a sum of $2 billion. increase internal artificial intelligence computing power and build a public supercomputing infrastructure.
This money will now be spent on “increasing the availability of AI computing and supporting access to sovereign AI computing power for public and private research” and ensuring Canada can be “globally competitive in a secure and sovereign environment.”
Since taking office, Carney has pushed Canada to embrace artificial intelligence technology and create an independent Canadian cloud that will better protect Canadians' sensitive data by keeping it within the country and subject to Canadian laws.
Artificial Intelligence Minister Evan Solomon explains how his new expert group's “30-day sprint” on a revamped artificial intelligence strategy hopes to keep companies and jobs in Canada despite hundreds of billions of dollars in investment from China and Silicon Valley. Solomon argues that Canada is “starting from an incredibly advanced position” in the industry, but also says the country has “challenges with adoption” of AI.
On quantum technology, the federal government is proposing $334.3 million over five years to various government departments and agencies to “help anchor quantum technology companies in Canada” and provide pathways for the technology to be deployed in defense-related applications and industries.
This money will come as part of a defense industrial strategy that the Carney government has not yet implemented. The strategy is not expected to appear until the end of this year.
Quantum computing can perform tasks at much faster speeds than traditional computing, but is still largely experimental.
The budget also announced several other smaller AI initiatives, including that AI Minister Evan Solomon will work with industry to identify promising AI infrastructure projects and enter into memorandums of understanding (MOUs) with those projects.
The federal government has already signed at least one memorandum of understanding with a Canadian artificial intelligence company. Last August, Ottawa announced it would partner with Cohere to explore ways to implement AI technology to improve government services and develop the commercial potential of artificial intelligence in Canada.
The Carney government is also leaving open the possibility of considering the need for new incentives and support for AI. The budget notes that Canada will “develop a new artificial intelligence strategy” by the end of this year, although it does not specify whether it will be unveiled at that time.
AI and Federal Government Operations
Budget 2025 also outlines a number of ways in which the federal government intends to introduce artificial intelligence technology into its own operations to “improve productivity and improve services.”
Ottawa intends to create a Digital Transformation Office “that will proactively identify, implement and scale technology solutions across the federal government—a generational opportunity for homegrown innovators,” the budget says.
Powering the generating AI requires a huge amount of energy. CBC's Rebecca Zandbergen headed to the data center in Nepean, where servers are furiously working to power the technology. She spoke with the founder of ThinkOn to find out what it takes to cool all those servers, as well as responsible artificial intelligence and the power grid.
“The Office will identify and eliminate redundant and counterproductive procurement rules, and leverage domestic and private sector expertise to accelerate AI adoption,” it adds.
Shared Services Canada (SSC), in partnership with the Department of National Defense and the Communications Security Agency, will also develop a made-in-Canada artificial intelligence tool that will be deployed across the federal government.
According to the budget, SSC will collaborate with leading Canadian artificial intelligence companies to develop an internal tool.
The budget also outlines how some departments and agencies have identified ways to use artificial intelligence technology to “achieve savings by streamlining workflows, reducing manual labor, and optimizing service delivery.”
For example, the Department of Justice will integrate artificial intelligence, advanced analytics and automation tools to streamline tasks. In the meantime, Transport Canada will leverage artificial intelligence and automation and reduce the cost of dedicated resources allocated to repetitive tasks.
Ottawa is also proposing to provide $25 million over six years starting this year to Statistics Canada to implement the Artificial Intelligence and Technology Measurement Program (TechStat), which would use data to measure how AI is used by organizations and understand the technology's impact on Canadian society.
