Canada Invests Over $1B to Build AI and Quantum Computing

Prime Minister Mark Carney’s first federal budget marks a pivotal step in advancing Canada’s position in artificial intelligence (AI) and quantum computing. The 2025 budget allocates more than $1 billion over five years to strengthen these technological ecosystems while integrating AI across federal departments and agencies (CBC). Finance Minister François-Philippe Champagne outlined that $925.6 million will go toward establishing a large-scale, sovereign public AI infrastructure. Of that, $800 million will come from funds announced in the previous budget, which dedicated $2 billion to enhancing domestic AI compute capacity and developing public supercomputing systems (MSN). This investment aims to “boost AI compute availability” for both public and private research, ensuring Canada remains globally competitive in a secure and sovereign environment.

Carney’s administration is emphasizing the importance of a sovereign Canadian cloud, one that stores data within national borders under Canadian laws. The push for this infrastructure aligns with broader efforts to safeguard sensitive information while promoting innovation. Minister of Artificial Intelligence Evan Solomon, who leads an expert panel to update Canada’s AI strategy, described the initiative as essential to keeping companies and jobs in Canada amid fierce global competition from China and Silicon Valley (CBC). Solomon acknowledged that while Canada holds an advanced position in AI, it faces an “adoption problem,” suggesting the government’s new measures could help bridge that gap.

Alongside AI investments, the government is committing $334.3 million over five years to quantum computing. This funding, drawn from the forthcoming Defense Industrial Strategy, will help anchor quantum technology companies in Canada and encourage applications in defense and related industries (iAsk). Though quantum computing remains largely experimental, its potential to perform tasks far faster than traditional systems could make it a cornerstone of Canada’s technological advancement.

The budget also introduces smaller but strategically significant AI initiatives. Solomon will collaborate with industry leaders to identify promising infrastructure projects and formalize partnerships through memoranda of understanding (MOUs). The government has already taken steps in this direction, signing an MOU with Toronto-based AI firm Cohere in 2024 to explore how AI can enhance public services and expand Canada’s commercial AI capabilities (MSN). Additionally, the federal government plans to develop a comprehensive AI strategy by the end of the year, leaving room for potential new incentives and supports to drive sector growth.

To modernize public administration, the 2025 budget details how AI will be embedded into government operations to “enhance productivity and improve services.” A new Office of Digital Transformation will be established to identify, implement, and scale technology solutions across departments, described as a “generational opportunity for domestic innovators” (CBC). This office will also work to eliminate outdated procurement rules and accelerate the adoption of emerging technologies by leveraging internal expertise and private-sector partnerships.

Shared Services Canada (SSC), in collaboration with the Department of National Defense and the Communications Security Establishment, is tasked with developing a made-in-Canada AI tool for use across federal departments. The budget highlights several examples of how AI is already being integrated into public services. The Department of Justice will use AI, advanced analytics, and automation to streamline administrative workflows, while Transport Canada will deploy automation to reduce repetitive tasks and cut costs.

Finally, the government will allocate $25 million over six years to Statistics Canada to launch the Artificial Intelligence and Technology Measurement Program (TechStat). This initiative will track how AI is used by organizations nationwide and assess its social and economic impact. Together, these efforts demonstrate a comprehensive approach to AI and quantum innovation, one that not only builds domestic capacity but also redefines how Canada’s government and industries operate in an increasingly digital future (iAsk).

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Works Cited 

CBC News. “Federal Budget Dedicates over $1B to Boost Canadian AI and Quantum Computing.” CBC News, 2025, https://www.cbc.ca/news/politics/federal-budget-quantum-ai-computing-9.6966549. 

MSN News. “Federal Budget Dedicates over $1B to Boost Canadian AI and Quantum Computing.” MSN, 2025, https://www.msn.com/en-ca/news/canada/federal-budget-dedicates-over-1b-to-boost-canadian-ai-and-quantum-computing/ar-AA1POkpT. 

iAsk News. “2025 Budget Outlines How Federal Departments, Agencies Will Use AI.” iAsk News, 2025, https://www.iask.ca/news/733bd00eb46476d5b98abc32a172c9b6/federal-budget-dedicates-over-1b-to-boost-canadian-ai-and-quantum-computing.

Rawpixel Ltd. “Canadian Flag Against Blue Sky. Free Public Domain CC0 Photo.” Rawpixel, 2025, https://www.rawpixel.com/image/6043187/photo-image-public-domain-banner-blue.

Cass-Beggs, Duncan. “A Welcome Voice for Canada on the Future of AI.” Centre for International Governance Innovation, 2024, www.cigionline.org/articles/a-welcome-voice-for-canada-on-the-future-of-ai/.