Canada Faces Generative AI Adoption Challenges Despite Federal Strategy Efforts

Prime Minister Mark Carney has asserted that Canada is among the global leaders in artificial intelligence (AI), alongside the United States, China, and France. While Canada boasts renowned AI researchers, such as Geoffrey Hinton and his team in Toronto, leadership in research does not equate to widespread AI adoption across the economy. A survey revealed that only 21.2% of Canadian workers used generative AI on the job by mid-2025, compared to 45.6% in the United States. The federal government's “AI for All” strategy aims to address this gap but acknowledges the broader challenges of sluggish economic growth and low productivity.

The strategy highlights the need for regulatory reforms to support AI adoption, particularly for small- and medium-sized enterprises. However, funding alone is insufficient; businesses must also redesign workflows and train workers. The government should track adoption and productivity gains to ensure effective use of subsidies. Additionally, Canada must attract investment in AI infrastructure, such as hyperscale data centres, by creating a competitive and predictable regulatory environment. Alberta, for instance, has positioned itself as open for business, securing a proposed C$13 billion investment from Meta for a new data centre.

Trust in AI remains a significant hurdle. Industry leaders often present AI in extreme terms, either as a groundbreaking invention or a catastrophic threat, which fuels public skepticism. The government’s strategy includes initiatives to improve AI literacy, but its success will depend on whether training translates into confidence and practical use. Canada ranked poorly in a KPMG, University of Melbourne study, placing 44th on AI training and literacy and 42nd on trust in AI systems. To build trust, the government should require firms to disclose AI-related decisions, test for errors, and allow challenges to mistakes.

The global AI race is underway, and Canada must implement policies that foster adoption, trust, and innovation. While the federal strategy identifies key challenges, its effectiveness will depend on whether provincial and local governments remove barriers and address community concerns. Achieving these goals could help Canada close the productivity gap with the United States and escape economic stagnation.