Ottawa spent $831 million on AI contracts over three years
The federal government spent more than $800 million on artificial intelligence technology between January 2023 and March 2026, according to spending data released in response to a parliamentary request.
The total includes two major deals: a $350 million contract with Dayforce to replace the troubled Phoenix pay system and a $240 million investment in the Canadian AI company Cohere. The remainder spans hundreds of contracts ranging from ChatGPT subscriptions costing a few hundred dollars to multimillion-dollar agreements with various vendors.
Conservative MP Jagsharan Singh Mahal requested the information from all federal departments, agencies, and Crown corporations. Not all entities complied, meaning actual spending exceeds the $831 million figure provided.
Where the money went
Public Services and Procurement Canada and Innovation Canada led spending due to the Dayforce and Cohere deals. National Defence followed at $83.7 million, the Canada Revenue Agency at $29.9 million, and Veterans Affairs Canada at $25.1 million.
The CRA signed a $17.5 million contract with Sailpoint Technologies for machine learning analytics to flag high-risk users. National Defence spent $6.3 million on mapping software from Ecopia Incorporated that identifies land features from satellite imagery.
Veterans Affairs directed nearly all its AI spending toward a tool that processes medical records and generates claim summaries for disability adjudicators. Fisheries and Oceans Canada spent $1.27 million on AI.Fish, a customized solution for fishery management and ghost-gear detection.
The Bank of Canada signed a $12.1 million agreement with Microsoft for M365 Copilot implementation.
The government's clarification
A spokesperson for AI Minister Evan Solomon said the $800 million figure "should not be read as one single total for government purchases of AI tools." The sum combines different spending categories: departments using AI-enabled tools and cloud services, digital modernization projects where AI is one component, and programs supporting Canadian AI companies and compute capacity.
National Defence submitted the most contracts at 104, followed by the National Research Council Canada with 61 and Innovation Canada with 38.
What's not included
Intelligence agencies CSE and CSIS declined to disclose spending details, citing national security and operational requirements. CBC/Radio-Canada said contract values were protected under the Access to Information Act unless the deal involved a public tender.
Several departments reported they cannot provide the data because they don't track AI spending in a centralized database. Those include the RCMP, Natural Resources Canada, and Crown-Indigenous Relations and Northern Affairs Canada.
For government professionals managing or overseeing AI implementation, understanding how federal agencies approach these contracts and allocate resources is essential. Learn more about AI for Government or explore how policy decisions are informed by AI capabilities through our AI Learning Path for Policy Makers.
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