In 2025, Canada recognized the opportunity for Canadians to buy and build.
BetaKit wraps up the year with a look at the biggest tech stories of 2025. There will be even more news in December, you can read the full series Here.
Sovereignty entered the Canadian lexicon this year in the wake of a perfect storm: existential threats to the country from US President Donald Trump and the shift in political power caused by ardent nationalism haven't seen it lately.
This modern recognition of sovereignty has the potential to transform Canada's technology ecosystem. But real change depends on the nation doing the hard work to move beyond flashy, bombastic nationalism.
Catalyst
Trump's second term began with a promise to impose tariffs on Canada. His words immediately confused domestic innovators into chaos: Companies like Lightspeed and Paperplane are bracing for currency fluctuations, logistics nightmares and market panics. US President threatens to annex Canada economic strength.
The need to control Canadian data, cloud services and the Internet has become an opportunity for domestic companies looking to capitalize.
Canadians reacted with shock, anger and a rapid change in our political views and consumer habits. By April, more than half of Canadians thoughtful security and sovereignty are the top priority (up from about 20 percent about a decade ago). The declaration of economic war provoked push to buy Canadianfrom grocery shelves to software, most Canadians survey in February said they were willing to pay more for Canadian goods, and most of them boycotted American goods.
Mark Carney carried this nationalist wave into the leadership of the Liberal Party and then into the highest office of the country. Under the former head of the Bank of Canada, the word “sovereignty” became the crown jewel of the feds' innovation platform and was mentioned more than 80 times in the 2025 budget. Carney's cabinet, including AI Minister Evan Solomon and Industry Minister Mélanie Joly, have stressed that ensuring Canada's digital and physical sovereignty is of paramount importance.
Implementation
Canadians have also begun to scrutinize our supply chains more closely for American presence. With an unstable player in power in the United States, Canada's dependence on American technology—from cloud services to space launches—has come to seem more like a risk than an asset.
Reports have shown the depth of this dependence: the top three providers of cloud services for business and government in Canada (and around the world!) are Microsoft, Amazon Web Services and Google. Only one Canadian company, ThinkOn, is allowed to sell its products to the government. The influence of this dependence was noticeable during Amazon Web Services shutdown earlier this year. It knocked out much of the world's internet, affecting Canadians trying to check their Wealthsimple account or buy Jays tickets on Ticketmaster.
This is not just a matter of trust, but a matter of control. The US CLOUD Act and the PATRIOT Act allow US law enforcement agencies to query data stored on servers owned by US companies at any time, even if they are located in Canada. “Bye [cloud service provider] “that operates in Canada is subject to the laws of a foreign country, Canada will not have full sovereignty over its data,” said one of the Ottawa representatives. white paper notes.
If the government wanted to use sovereign dollars, this was the perfect time to spend them here. But when it comes to the intangible economy, simple is just a publicity stunt.
The need to control Canadian data, cloud services and the Internet has become an opportunity for domestic companies looking to capitalize. Benjamin Bergen, then-president of the Council of Canadian Innovators, called it “Now is the time to take bold action to secure our economic future.” Computer infrastructure companies ThinkOn, Hypertec, Aptum and eStruxture have merged to create a Canadian sovereign cloud option.
Canadian government historically did not buy Canadian technologies. If the government wanted to use sovereign dollars, this was the perfect time to spend them here. But when it comes to the intangible economy, simple is just a publicity stunt.
Complication
The federal government tends to direct investment in innovation to foreign firms, or at least their Canadian subsidiaries. This bad habit dates back to before the current government. The Trudeau-era Sovereign Computing Strategy's first $2 billion commitment was $240 million to scale Toronto and federal champion Cohere to purchase computing power. But most of that money goes to the owner of that computing power: US data center operator CoreWeave. An analysis of the deal by Canadian think tank SHIELD gave it 2/10 Sovereignty assessment.
Indiscriminate spending continued under Carney's liberals. Recent federal investments in Nokia Canada also angered Canadian tech leaders, who saw it as yet another example of foreign direct subsidies and access to affiliates.
The problem may lie in the complexity of sovereignty itself, both in the meaning of the word and in the ease of its execution. Take, for example, the new Office of Major Projects, which Carney promised will build an independent Canadian cloud shortly after its launch. Experts have warned that an entirely “Canadian cloud” will be created. difficult to removeand almost impossible without American hardware (damn those pesky Nvidia chips).
If this is the case, then what is the value of being fully Canadian? Ottawa's new “Buy Canada” purchasing rules seem to indicate that if you do business in Canada, you are Canadian. enoughwhich reasonable people on both sides of the debate might perceive as an understandable loophole or a complete betrayal of the national moment. If you close your eyes and listen to the wind, you may hear Minister Solomon's oft-repeated mantra: “Sovereignty is not loneliness.” Okay, but what then?
Future
These complexities must be unraveled, not ignored, if Canada is serious about building sovereign technology capabilities. We will be watching two political changes. First, whether much of the government's computing strategy that has not yet been allocated will be transferred to Canadian companies rather than to American cloud providers. Secondly, is Buy Canadian Policy would actually mean more Canadian procurement agreements.
In 2025, Canadians began to think about what a world where we build, buy and host our own technology might look like. In 2026, the country will need to figure out how (and if) it can do this. A wave of sovereignty has arrived, scattered across federal policy documents, LinkedIn posts, and press releases. We will have to wait and see whether this wave will move from performativity to pragmatic action.
Artistic image courtesy of Madison McLachlan for BetaKit.
