Ottawa commits over $1B to AI and quantum: what it means for public servants
Canada's 2025 budget puts more than $1 billion over five years into artificial intelligence and quantum computing. The plan grows domestic compute capacity, accelerates AI use across departments, and builds a sovereign approach to data and infrastructure.
The message for the public service is simple: AI adoption is moving from pilots to operations. Departments will be expected to modernize workflows, document risk, and show measurable results.
Funding at a glance
- $925.6 million over five years for a large-scale sovereign public AI infrastructure to support public and private research. Of this, $800 million is repurposed from last year's $2 billion compute initiative.
- $334.3 million over five years for quantum technology through the forthcoming Defence Industrial Strategy, with an emphasis on anchoring firms in Canada and defence use cases.
- $25 million over six years for Statistics Canada's Artificial Intelligence and Technology Measurement Program (TechStat) to track adoption and effects across the economy and society.
- An Office of Digital Transformation to identify, implement, and scale technology solutions across government while clearing procurement bottlenecks.
- Shared Services Canada, with National Defence and the Communications Security Establishment, will build a made-in-Canada AI tool for internal use in the federal government.
- More MOUs with Canadian AI firms are expected, building on the announced partnership with Cohere for public service use cases.
- A refreshed federal AI strategy is slated by year-end.
Why "sovereign" AI matters for departments
Sovereign AI infrastructure means data residency, security, and compliance remain under Canadian jurisdiction. It also aims to give researchers and departments reliable access to compute, so projects don't stall for lack of capacity.
Expect clearer channels to request resources, standardized toolsets, and guardrails that meet federal privacy and security requirements.
How AI will show up in operations
The budget highlights practical use cases: Justice will apply AI, analytics, and automation to streamline legal and administrative tasks. Transport Canada will reduce manual effort on repetitive work.
The new Office of Digital Transformation will scale what works, cut redundant procurement rules, and move proven tools into production. The SSC-DND-CSE initiative signals a coordinated approach to building secure, internal AI capabilities with Canadian vendors.
Governance and risk: what you'll be asked to follow
- Run an Algorithmic Impact Assessment for systems that influence decisions affecting clients or employees. Reference: Algorithmic Impact Assessment (Government of Canada).
- Confirm data classification and residency. Use approved guardrails for protected information and ensure audits are possible.
- Work with CSE and your security team on threat models, model supply-chain controls, and incident response.
- Address records management, explainability, human oversight, and accessibility from the start.
- Prepare unions and HR for role changes, reskilling, and new workflows.
Practical next steps for your team
- Appoint an AI lead and a small working group across policy, IT, privacy, security, and service delivery.
- Identify 3-5 high-volume, rules-based processes that cause backlogs. Shortlist two for 90-day pilots.
- Inventory datasets, owners, and sharing constraints. Start with clean, well-governed internal data.
- Draft your AIA, privacy impact assessment, and threat model alongside the pilot plan.
- Engage SSC early on access to sovereign compute, approved tools, and vendor options.
- Update procurement templates with model evaluation criteria, data residency terms, and exit plans.
- Define success metrics: cycle time, case throughput, error rates, and client satisfaction.
- Plan training for analysts, managers, and frontline staff so the pilot can actually land.
- Prepare to report usage and outcomes to support TechStat measurement.
Quantum: what to watch
The quantum funding aims to anchor companies in Canada and build pathways for defence and industry adoption. While many applications are early, departments should begin basic readiness work.
- Start a cryptography inventory and assess exposure to future quantum threats (crypto-agility planning).
- Track national guidance and pilots tied to the Defence Industrial Strategy and the National Quantum Strategy: National Quantum Strategy (ISED).
Timeline and signals to monitor
- Federal AI strategy release by year-end.
- Defence Industrial Strategy update with quantum funding details.
- Calls for proposals on sovereign AI infrastructure and new MOUs with Canadian AI firms.
- SSC announcements on the internal AI tool and onboarding process for departments.
Skills and capacity
Adoption will stall without skills. Build capability in prompt design, data handling, evaluation, and change management. Give teams short, focused learning paths tied to your pilot use cases.
If you need structured options for role-based upskilling, see these curated paths: AI courses by job.
This budget gives departments both the mandate and the means to move. Line up a pilot, get your governance in order, and be ready to plug into sovereign compute as it comes online.
Your membership also unlocks:
