Canada’s 2026 AI Strategy: What Businesses Need to Know
Introduction
Artificial intelligence (“AI”) is reshaping economies, industries and the global competitive landscape at an unprecedented pace. Recognizing both the opportunities and the risks presented by this technological shift, the federal government launched Canada’s National Artificial Intelligence Strategy: AI for All (the “Strategy”) on June 4, 2026. The Strategy, presented as a five-year plan, sets out a comprehensive framework intended to position Canada as a global leader in the responsible development and adoption of AI. The Strategy also identifies priority sectors for federal support, including health and life sciences, energy and natural resources, transportation, agriculture, manufacturing and robotics.
The Strategy marks a notable shift in Canada’s AI policy. Rather than reintroducing standalone AI legislation comparable to the Artificial Intelligence and Data Act (“AIDA”), which formed part of Bill C-27 and died in early 2025, the federal government is using a broader set of policy and regulatory tools. AI-related risks are being addressed through privacy law reform, new online safety legislation, safety infrastructure, funding programs and various types of adoption supports. However, the absence of a standalone AI statute does not mean AI deployment is unregulated. Canadian organizations should remember that AI systems are already subject to existing legal frameworks, including privacy legislation, human rights laws, consumer protection requirements, intellectual property laws, employment law obligations and sector-specific regulations.
This article summarizes the Strategy’s six pillars and key takeaways for Canadian businesses. The Strategy is significant because it treats AI adoption as part of Canada’s broader economic agenda. Simultaneously, it suggests that businesses adopting AI will need to pay close attention to privacy, data governance and Canadian control over AI-related data and infrastructure.
From AI Leadership to Business Adoption
Canada has long been viewed as a leader in AI research. With globally recognized research institutions and pioneering talent, it became the first country in the world to introduce a national AI strategy in 2017. The new Strategy builds on that foundation, but its focus is more practical, moving from research excellence to broader commercialization.
The Strategy is intended to respond to Canada’s AI adoption gap. While the country has strong AI expertise, businesses have been slower to implement AI at scale. Through new funding streams and commercialization supports, the federal government aims to increase business adoption of AI to 60 percent by 2034.
Privacy and Data Sovereignty
One of the most important features of the Strategy is its emphasis on privacy and public protection. The government proposes to modernize consumer privacy legislation by reinforcing a fundamental right to privacy, strengthening individual control over personal data, protecting children’s information, and addressing harmful practices such as deepfakes and surveillance pricing. It also references new online safety legislation intended to protect Canadians, particularly children, from digital harms.
This is significant because the Strategy does not rely on a single comprehensive AI statute. Instead, privacy and safety measures appear to be doing much of the regulatory work, in addition to new legislation. Organizations using or developing AI should therefore expect privacy compliance, data governance and internal accountability to remain central to the federal policy direction.
The Strategy also approaches AI development through the broader lens of technological and data sovereignty. In this context, sovereignty extends beyond data residency to include control over the infrastructure, data, talent and governance systems that support AI development and deployment. The Strategy identifies gaps in Canada’s domestic compute and cloud capacity and recognizes that sensitive Canadian data may otherwise be subject to rules and regimes outside of Canada. To address these dependencies, the government proposes a “build-partner-buy” approach: building key sovereign capabilities domestically where possible, partnering with trusted allies where appropriate, and buying market solutions where necessary.
As a result, businesses supplying AI products or services to governments and public-sector institutions may also see increased emphasis on Canadian infrastructure, security requirements, transparency obligations and alignment with emerging federal procurement policies.
The Strategy’s Key Pillars
The Strategy is organized around six interconnected pillars aimed at encouraging AI adoption while protecting Canadian interests.
1. Protecting Canadians and Safeguarding Democracy
The first pillar focuses on the safe and secure development of AI. Through privacy reform, online safety legislation and measures addressing risks such as misuse of personal data, the government identifies public protection and trust as key priorities. This includes:
- Investing $50 million to expand the capabilities of the Canadian AI Safety Institute to help track and respond to emerging AI risks;
- Creating a “Canada Trusted AI Certification” program to help consumers identify trustworthy AI products in the marketplace, and renewing funding for the Standards Council of Canada’s AI Program to facilitate harmonization with global AI standards and robust quality assurance programs; and
- Enshrining fundamental privacy rights in Canadian law.
Since the release of the Strategy, the Federal government has introduced two new pieces of legislation: Bill C-34, containing the Safe Social Media Act, and Bill C-36, the Protecting Privacy and Consumer Data Act, which are beyond the scope of this article but will be discussed in upcoming posts.
2. Empowering Canadians
The Strategy also aims to help Canadians build the skills needed to engage with AI, including through expanded education, reskilling programs and a new National AI Literacy Initiative. This pillar largely emphasizes new opportunities for citizens, including government projections that AI adoption could contribute to the creation of up to 250,000 new jobs by 2031 and up to 90,000 AI-related job opportunities for young Canadians. The Strategy also acknowledges the disproportionate impacts of AI harms to equity-seeking groups, including Indigenous Peoples, and commits to ensuring Canadian-built AI tools protect cultural and linguistic expression and support Indigenous self-determination.
3. Powering Shared Prosperity
Another central focus of the Strategy is accelerating AI adoption across the economy, particularly among small and medium-sized enterprises (“SMEs”). Through access to financing and commercialization supports, the Strategy aims to improve productivity and competitiveness. To advance this goal, Canada plans to leverage the LIFT Program, a $500 million initiative of the Business Development Bank of Canada, to help Canadian SMEs access financing to integrate AI tools into their operations.
4. Building the Canadian Sovereign AI Foundation
To reduce reliance on foreign technologies, the Strategy prioritizes domestic AI infrastructure, including compute capacity, data resources and research capabilities under Canadian governance. The government will continue delivering on more than $2 billion in existing investments in Canadian AI compute capacity, and the Strategy commits to building a world-leading public supercomputer by 2031 as part of significantly enhanced sovereign infrastructure.
5. Scaling Canadian Champions
The Strategy also seeks to support high-potential Canadian AI companies as they scale domestically and compete globally. To ensure that promising Canadian companies do not grow elsewhere, the federal government has proposed a $500 million Canadian Tech Growth Fund to address the scale-up capital gap facing Canada’s most promising AI companies, and an additional $700 million in affordable sovereign compute for Canadian SMEs through an expansion of the Compute Access Fund.
6. Building Trusted Partnerships and Global Alliances
The final pillar focuses on Canada’s international partnerships in AI. The Strategy recognizes that AI development is increasingly dominated by large global technology companies, creating economic and security concerns for countries that rely heavily on foreign systems. Canada has launched the Sovereign Technology Alliance with Germany and plans to work with trusted partners on AI models, digital infrastructure, capital access, joint research and common safety standards.
What the Strategy Means for Canadian Businesses
For Canadian businesses, the Strategy is more than a policy announcement. It signals that AI adoption is becoming a national economic priority. Through funding and commercialization supports, the federal government is seeking to reduce barriers to adoption, particularly for SMEs. For businesses that have begun experimenting with AI but have not yet integrated it into core operations, the Strategy suggests that the coming years may bring more support for scaling those efforts.
Although the Strategy acknowledges concerns about job security, it provides limited detail on how these issues will be addressed. The government states that these challenges will be faced “head on,” but the Strategy’s emphasis is largely on opportunity creation, including through AI skills development and AI-related jobs. Businesses should consider workforce impacts early, including training needs, changing roles and how AI tools will be introduced in practice. Other considerations include labour relations, employee monitoring concerns, workplace privacy implications and transparency regarding how AI-assisted decisions affect employees.
At the same time, the Strategy points to a more active regulatory and policy environment. Businesses adopting AI should be thinking not only about innovation opportunities, but also about governance, risk management, privacy compliance and internal accountability.
Key Takeaways for Businesses
In light of the Strategy, Canadian businesses may wish to consider the following practical steps:
- Develop or update an internal AI governance framework that addresses privacy, bias, accountability, human oversight and acceptable use.
- Monitor developments in privacy and online safety legislation to identify new compliance obligations or risk areas.
- Assess whether employees need AI literacy and skills training before AI tools are adopted more broadly.
- Consider data sovereignty issues, including where data is stored, processed, accessed and governed when using AI systems.
- Evaluate intellectual property risks associated with training data, AI-generated outputs and ownership of content produced using AI tools.
- Review available funding and commercialization supports, including the LIFT Program.
The Strategy does not answer every question about Canada’s AI regulatory future. As with any federal policy initiative, implementation of the Strategy will depend on future legislation, funding appropriations, regulatory development and evolving government priorities. However, it gives businesses a clear indication of the federal government’s priorities: broader AI adoption, stronger privacy and data governance, investment in domestic AI capacity, and an AI-savvy skilled workforce. Businesses that begin considering these issues now will be better positioned to take advantage of new opportunities while managing the risks that may come with AI adoption.
The Privacy & Data Security Group at Aird & Berlis LLP frequently advises on every aspect of complex privacy and data security matters, including transactions, commercial relationships, litigation, regulatory concerns and emerging technologies. Our team closely monitors developments in technology and platform regulation and assists organizations in navigating evolving compliance obligations and risk considerations. Please contact the authors or a member of the group if you have any questions or require assistance.
