The Canadian government has announced a sweeping artificial intelligence strategy that will see the state take equity stakes in AI companies alongside direct funding. The policy, unveiled in Ottawa on Tuesday, marks a departure from traditional grant-based support, positioning the government as a co-investor in the rapidly evolving sector.
Under the plan, Ottawa will allocate a yet-unspecified portion of its AI investment budget to acquire minority shareholdings in domestic firms developing foundational models, healthcare AI, and industrial automation. Officials argue the model ensures that public returns match private gains, while maintaining strategic oversight of critical technology.
Background: Canada’s AI ecosystem, anchored by hubs in Toronto, Montreal, and Edmonton, has produced world-leading research but struggled to retain commercial talent. The new strategy follows a similar move by the UK’s British Business Bank, which has taken equity in venture capital funds, though direct state ownership of AI companies remains rare among Western governments.
Analysts have noted that the equity model could reduce the burden on taxpayers if successful, but critics warn of potential conflicts of interest and market distortion. The Canadian government has not disclosed the total fund size, but sources indicate initial commitments exceed CAD $2 billion over five years.
For UK readers, the development highlights growing global competition in AI governance. The British government has signalled interest in a sovereign AI capability, but has so far favoured grants and tax incentives over direct equity. The Canadian approach may influence Whitehall’s thinking as it reviews its own AI strategy ahead of the next spending review.
Source: Canada Department of Innovation, Science and Economic Development press release.