Making Sense of the Government of Canada’s “Securing Canada’s AI Advantage” Investment Announcement

Author(s): Matthew Bourne

A maple leaf created out of glowing points like a network.On April 7, 2024, the Government of Canada announced a C$2.4 billion package of measures from the upcoming Budget 2024 to secure Canada’s AI advantage. The objective of the investments outlined here are to help researchers and businesses both develop and adopt AI in a responsible manner, but these investments are also intended to help Canadian businesses accelerate transitioning to an economy where productivity and collective improvements in Canadian standards of living will trickle down. A narrative of declining productivity relative to other nations continues to weigh heavily in Ottawa. The announcement reminds me of Robert Reich’s Wealth of Nations in action, a conscious government effort to ensure that all Canadians can partake in the wealth that innovation can bring to society.

The measures are summarized as follows:


Additional Context

Investing $2 billion to build and provide access to computing capabilities and technological infrastructure for Canada’s world-leading AI researchers, start-ups, and scale-ups.

Supports the launch of a new AI Compute Access Fund for researchers and industry.

Includes developing a Canadian Sovereign Compute Strategy to support Canadian-owned and Canadian-located AI infrastructure.

Investing $200 million in boosting AI start-ups to bring new technologies to market and in accelerating AI adoption in critical sectors.

Sectors include agriculture, clean technology, healthcare, and manufacturing.

Investing $100 million in the NRC IRAP AI Assist Program to help small and medium-sized businesses scale up and increase productivity by building and deploying new AI solutions.

Intended to support companies with incorporating AI into their businesses and support investments in new AI-based solutions.

Supporting workers who may be impacted by AI, such as those in creative industries.

Includes $50 million for the Sectoral Workforce Solutions Program providing skills training for workers in potentially disrupted sectors and communities.

Creating a new Canadian AI Safety Institute, with $50 million to further the safe development and deployment of AI.

Intended to help Canada better assess and protect against the risks of advanced or nefarious AI systems.

Strengthening enforcement of the Artificial Intelligence and Data Act.

Includes $5.1 million for the Office of the AI and Data Commissioner. This aims to guide AI innovation in a positive direction.

Let’s break down these components to better understand what is in play and how leaders can best take advantage of these proposed investments.

Build and provide access to computing capabilities and technological infrastructure for Canadian AI researchers, start-ups, and scale-ups

This component contains the bulk of earmarked funds. Greater demand for compute capacity is anticipated as Canada increasingly adopts AI, in particular generative AI. Deep learning requires significant computing power in the form of robust GPUs (graphics processing units) or TPUs (tensor processing units). A made-in-Canada solution is seen as both a strategic advantage and a matter of national security in an increasingly digitized world, especially among research institutions that require high-performance computing. Ensuring independence in data sovereignty, compliance, and risk management of the entire technical stack is also driving intent, and the government wants to ensure that scalable infrastructure is ready.

Thought Model for Select the Ideal Infrastructure for Your AI Workload

Organizations need to ensure a standardized reference architecture that supports scalability, simplifies resource allocation, eases cloud service selection, and accelerates software configuration to optimize computing resource challenges. Be sure that your organization has prepared adequately: Our research Select the Ideal Infrastructure for Your AI Workload is a terrific accelerator for interested parties.

Much online news has been published recently about Canada’s decline in productivity relative to other nations. Canada is currently ranked as 29 out of 38 countries in the OECD on productivity performance (“OECD Compendium of Productivity Indicators 2024”). Over the long run, having the right infrastructure strategy remains a necessary foundation for driving innovation.

Boost AI start-ups to bring new technologies to market and accelerate AI adoption in critical sectors

With this section we see a targeted approach to engage by industry or sector, with agriculture, manufacturing, healthcare, and clean technology cited in the government’s press release. However, details are vague, and I worry that without further details much is left open to interpretation – including the definition of success. Info-Tech’s Artificial Intelligence Research Center provides an excellent starting point for those looking to accelerate value and return on investment, as does our AI Use Case Library for Federal Government publication.

Help small and medium-sized businesses scale up and increase productivity by building and deploying new AI solutions

Thought Model for Drive Business Value with Off-the-Shelf AI

This part of the announcement has received less press, but its impact is significant. Small and medium-sized businesses are defined as having 0 to 99 and 100 to 499 employees respectively. Critically, according to Business Development Bank of Canada, small and mid-sized businesses employee 88.3% of Canada’s working individuals in the private labor force and these businesses product 43% of the total value of Canadian exports (“10 things you (probably) didn’t know about Canadian small businesses”). The implications here are obvious: SMEs remain the engine of economic growth in Canada, and the government intends to foster agility and adaptation in many sectors. SMEs will have to make their investments carefully with vendors.

Since knowledge enables better decision-making, use Info-Tech’s rapidly evolving AI Marketplace for real-time intelligence on vendors, as well as our advice in Drive Business Value With Off-the-Shelf AI to allow teams to extract immediate and maximum value and return on invested capital. These recommendations also apply to quasi-private organizations such as Crown corporations.

Supporting workers who may be impacted by AI, such as those in creative industries

Artificial intelligence is now pervasive. What is not yet fully appreciated is that entire business operating models will undergo change as AI solutions continue to evolve in complexity and reach and as increasingly more sophisticated use cases drive transformation. There is no escaping this change. We encourage continual learning and development of AI literacy and skills, such as Info-Tech’s AI Primer for Business Leaders and the AI Workforce Development Program service offering.

Creating a new Canadian AI Safety Institute, with $50 million to further the safe development and deployment of AI

Thought model for Develop Responsible AI Guiding Principles

This line item in the is buried deep within the government’s overall announcement, but in the long run it may be one of the most critical in driving Canada’s evolving AI landscape – and keeping it on the correct path. Responsible AI is a keystone for operationalizing artificial intelligence investments and is generally a Canadian strength: It reflects our country’s proud history as a leader in the AI space. Responsible AI establishes safeguards for technical and nontechnical staff when working with AI technologies so that the organization can leverage its innovative potential to the fullest while protecting against an erosion of value. For further guidance Info-Tech provides a highly applicable set of materials to address this: See our Develop Responsible Guiding AI Guidelines to accelerate this important step.

Thought Model for Govern the Use of AI Responsibly With a Fit-for-Purpose Structure

Establishing effective AI guidelines is critical for enabling and sustaining processes autonomized through artificial intelligence, and ensuring responsible AI throughout reinforces trust and effective partnership between business and IT teams. However, these guidelines are only beneficial if they are governed effectively, and in our experience, this capability poses a challenge to many of our members. There are numerous security and privacy risks that need to be managed, especially with generative AI solutions. This remains an evolving landscape, and privacy considerations will be an increasing consideration for both private and public institutions. Begin building rigor into your governance processes now with enablers such as AI privacy risk assessments.

Strengthening enforcement of the Artificial Intelligence and Data Act

The Government of Canada needs to provide greater urgency and leadership to both governance and regulation as well as the rising ubiquity of AI in applications. Key here will be better understanding the mandate for the Artificial Intelligence and Data Commissioner and whether that individual is independent and impartial rather than embedded within a Government of Canada department. Positioned appropriately, this key role will also provide an effective conduit between private and public sectors.

Our Take

The Government of Canada’s recent announcement on increasing investment toward AI is a start, but more work remains. The national AI strategy first launched in 2017 as the Pan-Canadian Artificial Intelligence Strategy and much focus was on establishing the country’s three National AI Institutes. Much has changed in seven years. Canada’s national AI strategy needs significant revision and update.

Significantly, the Government of Canada itself lacks a comprehensive AI strategy. The Directive on Automated Decision Making and related department guides require significant updates. Securing Canada’s AI advantage also requires that Canadian government leadership addresses the rise of shadow AI.

Regardless of whether investments flow to the Government of Canada or through partnerships with external parties, good strategic execution requires measures of performance. Strong leadership and coordinated action are needed by all senior leaders across Government of Canada; this is not just an “IT issue.” Canadians live in a world of exponential IT, and both private and public sectors can expect ever-increasing velocity and disruption. The real question is whether IT leaders are ready to embrace this as an opportunity.

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