Canada

Canada may reach its AI adoption target and still miss its promised productivity gains. Delivering those gains will require deep adoption by large firms, supported by regulatory certainty and stronger tax treatment for AI deployment.

Canada’s new AI strategy sets the right goal but focuses on the wrong problem: lowering costs when most firms struggle to identify valuable uses for AI. Ottawa should help businesses find and implement the right tools, not simply subsidize their purchase.

The USMCA’s digital trade rules set the global standard. Now, policymakers should modernize them for the age of AI, close loopholes that enable data localization and discriminatory taxes, and build a more secure, competitive North American digital economy.

Canada should significantly expand commercialization-focused grant programs through the Canadian Institutes of Health Research (CIHR) and increase Canada’s overall health science research investments to a scale commensurate with global competition.

Canada funds university research but gives universities too little reason to turn that into Canadian firms, patents, and industrial capacity. To better align their incentives with national goals, funding should flow in part on standardized commercialization outcomes, with universities left to decide how to deliver them.

Bill C-34 gives platforms a reason to design safer services for children. But sequencing matters: If Ottawa brings the restriction into force before the Digital Safety Commission is operational, the fastest path to compliance will be removing the very users the bill means to protect.

Canada says it wants to be a technology and innovation economy, but its research budget still treats balance across disciplines as the priority. If innovation is the actual goal, the Carney government should shift funding from social sciences and humanities toward NSERC and CIHR.

A ban on personalized pricing would not make Canada more affordable; it would eliminate discounts at the bottom of the distribution and raise the floor for price-sensitive shoppers, the very consumers these proposals aim to protect.

Canadian innovation, productivity, and competitiveness are weak. Absent serious policy change, they will likely get even weaker. A turnaround requires addressing Canada’s core challenges—most fundamentally, a Canadian political economy that is not designed for the techno-economic environment the country now faces.

Canada’s privacy regulators are restricting the use of public online data for AI training, but this approach could undermine AI innovation. Canada should instead adopt a harm-based framework focused on concrete privacy risks.