Prime Minister Mark Carney has presented the Liberal government’s first official budget, titled Canada Strong, which outlines significant investments aimed at enhancing national sovereignty through economic productivity and defense. A key focus of this budget is the role of artificial intelligence (AI), identified by eight federal agencies as a crucial technology for reducing operational costs while boosting productivity.
The budget emphasizes the development of the defense industry by promoting the creation and commercialization of dual-use technology, which encompasses goods and software applicable for both civilian and military purposes, including AI systems. This focus raises questions about whether Canada Strong genuinely addresses the complexities of AI integration or if it signals a more superficial approach to a technology with significant implications.
The Canadian government has a history of supporting AI research through various initiatives. From 2006 to 2015, Prime Minister Stephen Harper invested over $13 billion in science and technology. Under Prime Minister Justin Trudeau, the 2017 budget titled Building a Strong Middle Class was the first to explicitly acknowledge AI, highlighting its potential as a transformative economic force. The government allocated $125 million to establish the first Pan-Canadian Artificial Intelligence Strategy and reaffirmed its commitment in subsequent budgets, including a renewal of the strategy with an additional $368 million in 2021.
The 2025 budget introduces a shift in focus towards adoption, productivity, and sovereignty, emphasizing dual-use technology. Critics argue that this emphasis on integration may undermine the necessary regulatory frameworks and ethical considerations surrounding AI. The extensive adoption of AI across federal departments, including the Canada Revenue Agency and Employment and Social Development Canada, could hinder the development of essential guardrails and civil-society engagement, potentially compromising transparency and accountability.
One pressing concern is the lack of a robust regulatory framework following the abandonment of the Artificial Intelligence and Data Act in 2025. The current governance model leans more on norms rather than enforceable laws, which may convert Canada’s perceived strengths in AI into vulnerabilities. The government’s reliance on foreign software and hardware, such as Microsoft CoPilot and NVIDIA chips, further complicates the landscape, as does the absence of clear guidelines on lethal autonomous weapons.
Promoting rapid AI adoption within an unregulated environment, particularly for public administration and military applications, poses significant risks. These include reduced administrative transparency, potential discrimination embedded in algorithms, and ethical concerns regarding mass surveillance and unintended consequences. The current trajectory, which prioritizes cost reduction and dual-use applications, raises alarms about the potential disruption to services that underpin Canadian democracy.
In summary, while the 2025 budget seeks to position Canada as a leader in AI, critics argue it may fall short by neglecting crucial regulatory and ethical considerations. The narrative of promoting AI as an economic driver could inadvertently lead to significant weaknesses in governance and oversight, challenging the very foundation of what it means to be “Canada Strong.”
Nicolas Chartier-Edwards receives funding from the Social Sciences and Humanities Research Council. François-Olivier Picard has disclosed no relevant affiliations beyond their academic appointment.
