Prime Minister Mark Carney’s initial budget outlines a plan to invest over $1 billion in the next five years to strengthen Canada’s artificial intelligence and quantum computing sectors, and to integrate AI technology more extensively into federal government functions. Finance Minister François-Philippe Champagne presented the 2025 budget on Tuesday afternoon, proposing to allocate $925.6 million over the next five years for a substantial “sovereign” public AI infrastructure project.
Of the total investment, $800 million will be sourced from funds designated in the previous federal budget, which had earmarked $2 billion to enhance domestic AI compute capacity and establish public supercomputing infrastructure. This funding will be utilized to enhance AI compute availability, facilitate access to sovereign AI compute capacity for public and private research, and ensure Canada’s competitiveness in a secure and sovereign setting.
Since taking office, Carney has advocated for Canada’s adoption of AI technology and the development of a sovereign Canadian cloud to safeguard sensitive data within the country and under Canadian jurisdiction. Additionally, the government plans to allocate $334.3 million over five years to various government departments and agencies to support quantum technology companies in Canada and explore the technology’s application in defense-related sectors and industries.
The budget also includes smaller AI initiatives, such as collaborating with industry to identify promising AI infrastructure projects and signing memoranda of understanding (MOUs) with these initiatives. Furthermore, the government is considering providing new AI incentives and support, with plans to develop a new AI strategy by the end of the year.
In terms of federal government operations, the 2025 budget outlines strategies to embed AI technology to enhance productivity and service delivery. This includes establishing an Office of Digital Transformation to implement and scale technology solutions, eliminating redundant procurement rules, and hastening AI adoption. Shared Services Canada will work with partners to develop a made-in-Canada AI tool for federal government use.
Departments and agencies are also exploring ways to leverage AI technology to achieve savings, streamline workflows, reduce manual efforts, and optimize service delivery. Additionally, Statistics Canada will receive $25 million over six years to implement the Artificial Intelligence and Technology Measurement Program (TechStat) to assess AI usage by organizations and its societal impact in Canada.