Canada to strengthen AI advantage – maybe

As noted below, Canada has 10% of the world’s top researchers in the field and has been topping the G7 in AI academic papers published per capita since 2019. However, our country lags behind other G7 countries in computational achievements. In this article, we look at some of the key factors for Canada's progress in AI development.

AI Advantage Overview

A week ago, Deputy Prime Minister Freeland unveiled what may turn out to be the Trudeau government’s last budget. While the headlines have focused on capital gains taxes and housing measures, it should not go unnoticed that $2.35 Billion has been set aside for what the Government has termed, Strengthening Canada’s AI Advantage.

Canada has long been a player on the AI front, and it is not just the work of Geoffrey Hinton and Yoshua Bengio that stands out. According to the OECD, Canada has 10% of the world’s top researchers in the field and has been topping the G7 in AI academic papers published per capita since 2019.

Unfortunately, Canada’s computational capabilities lag behind these other G7 nations, by a large margin.  And without that computational infrastructure, it will be next to impossible to scale our research into commercialized products, and increasingly difficult to keep these great minds here at home.

Canada’s Minister of Innovation, Science and Industry, Francois-Phillipe Champagne has described the challenge this way, “We have the brain. Now we need the mainframe.”

Budget 2024 proposes $2.35 Billion over five years for a new AI Compute Access Fund & Canadian AI Sovereign Compute Strategy ($2 Billion), Canadian start-ups looking to develop AI via Canada’s Regional Development Agencies ($200 Million), the National Research Council’s AI Assist Program ($100 Million), and a new Sectoral Workforce Solutions Program ($50 Million).

Sectoral workforce programs are nothing new, but the government has given itself time to figure out just which sector(s) will be getting this money. They have given themselves until fiscal year 2025-26 to figure that out.

When this announcement was first announced in a pre-budget announcement the Prime Minister named the e-commerce, finance, and journalism sectors as potential recipients of these funds. And the program was billed to “help workers learn new skills so that they can use AI to their advantage.”  During that same event, the Deputy Prime Minister stated the workers who would receive support included those in the creative industries. I am sure there will be no shortage of those.

There is certainly no shortage of industries that have already been and will be impacted by AI. One would expect there to be a fierce behind-the-scenes battle for a share of the $50 Million that has been set aside.

The National Research Council’s AI Assist Program and Canada’s Regional Development Agencies are both well established and the $85 Million that is earmarked for this fiscal year should flow mostly from them. For the record, this money is meant to “help small and medium-sized businesses and innovators build and deploy new AI solutions, potentially in coordination with major firms”, and “boost AI start-ups to bring new technologies to market, and accelerate AI adoption in critical sectors, such as agriculture, clean technology, health care, and manufacturing.”

No word yet on whether these sectors will also receive sectoral workforce adjustment funding, and I will leave it for others to debate whether the capital gains tax changes will work at cross purposes here.

The success of these plans of course hinge on building Canada’s computational capabilities. The biggest portion of this funding has been set aside for a new AI Compute Access Fund & Canadian AI Sovereign Compute Strategy. Judging by the budget tables, it has been enveloped mostly for the 2027-28 and 2028-29 fiscal years.

Long before this money is spent the government plans to consult with industry partners and research institutes to “swiftly’ implement. But they have already staked out policy planks that will drive how this money is eventually spent. In the preamble to this chapter, Budget 2024 states that “challenges accessing compute power slows down AI research and innovation, and also exposes Canadian firms to a reliance on privately-owned computing, outside of Canada.” And that, “this comes with dependencies and security risks and is a barrier to our AI firms and researchers.”

So, private and foreign bad, public, and domestic good. Or so it would seem. But fiscal years 2027-28 and 2028-29 are a long way off. And the next federal government may have something else in mind.

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