Canada helped invent modern artificial intelligence, yet its early research edge is slipping as other nations turn algorithms into exports faster. A widening gap in skills, trust and compute capacity is keeping many domestic firms on the sidelines just as global demand for AI products soars.
A KPMG survey released in June shows only 24 percent of Canadians have received any AI training, ranking the country fourth-last among 47 economies and well below the 52 per cent global average. Barely 34 percent say they trust information generated by AI, again trailing world peers by double digits.
“Higher AI literacy leads to higher AI adoption, a critical ingredient to solving Canada’s productivity crisis and creating a more competitive and dynamic economy,” Benjie Thomas said in the report.
Low literacy translates into cautious corporate spending. KPMG’s Generative AI Adoption Index finds 93 percent of Canadian business leaders use the technology somewhere in their operations, but only two per cent see a return on investment.
Without clear pay-offs at home, many firms hesitate to scale solutions abroad, limiting the country’s share of the fast-growing global market for AI-enabled services.
Commercial gap widens despite big public bets
Ottawa has tried to push research breakthroughs toward the factory floor. Budget 2021 set aside up to C$443.8 million over ten years to renew the Pan-Canadian Artificial Intelligence Strategy, including C$185 million aimed at commercialization. This spring’s budget added another C$926 million for sovereign compute infrastructure, signalling the government’s concern that limited access to high-end chips could blunt Canada’s trade ambitions.
Even with those commitments, the country’s relative position is static. The 2024 Global AI Index keeps Canada in the top ten on research talent but notes that France and Israel now outrank it on private investment and start-up activity. Venture capital in Canadian AI totalled about US$3 billion last year, third in the G7, yet that money is spread across more than 1,500 start-ups, leaving few with the scale to win large export contracts.
Toronto-based Cohere is a rare exception. At the Reuters NEXT conference, co-founder Aidan Gomez argued that “the U.S. and Canada sit in an incredible position to be the world’s partner in adopting this technology.” His optimism highlights the paradox: Canada breeds top researchers and promising platforms, but only a handful convert that science into global sales.
What could close the gap
Policy thinkers point to three near-term levers. First, broaden training so workers outside tech hubs can deploy AI safely and confidently, expanding the domestic customer base that home-grown vendors need to reach scale.
Second, accelerate permitting for new data centres and chip facilities to cut infrastructure bottlenecks. Finally, adopt clear, internationally aligned rules under the proposed Artificial Intelligence and Data Act to reassure buyers that Canadian solutions meet emerging safety norms.
Canada proved with the Pan-Canadian AI Strategy that early, coordinated investment can shape a frontier field. Keeping that leadership now depends on turning lab discoveries into tradable products before rivals lock in market share. Until more firms master that last mile, the country’s celebrated research may remain an export in waiting rather than a real engine of trade growth.
