Canadas Liberals AI Strategy Unveiled

Fresh off his election victory, Prime Minister Mark Carney has been focused on standing up to Donald Trump's claims on Canada as the 51st state and American tariffs . But while that political drama unfolds, one topic that seems to have quietly slipped under the radar is the rise of artificial intelligence.

Despite its transformative impact on everything from jobs to national security, AI received surprisingly little attention during the campaign and in the first weeks following Carney's victory. The consequences of that lack of attention are already starting to show, as emissions and electricity costs continue unabated without a clear vision of where AI fits in.

Although Carney has appointed former journalist Evan Solomon as Canada's first-ever AI minister, it's not yet clear what action the Liberal government plans to take on AI.

The Liberals' "Canada Strong" plan outlining the prime minister's proposals is scarce on details. Still, it provides some clues on how the Liberals see AI and what they believe it offers to the Canadian economy - and also what they seem to have misunderstood.

Economy of the future?

First, the plan includes some robust initiatives for improving Canada's digital infrastructure, which lags behind other leading countries, especially in terms of rural broadband and reliable cell service.

To accomplish these goals, the Liberals say they'll incentivize investment by "introducing flow-through shares to our Canadian startup ecosystem…to raise money faster" for AI and other technologies.

In other words, they will reuse the model of mining and oil companies whereby investors can claim a tax deduction for the same amount as their investment. A major question is whether Canada's investment ecosystem has enough big players willing to take these risks.

The plan gets less promising as it comes to the implementation of AI within "the economy of tomorrow."

The Liberals say they plan to build more data centres, improve computing capacity and create digital supply chain solutions "to improve efficiency and reduce costs for Canadians."

All that that sounds OK - so far. But how will they do this?

Connecting AI with Armed Forces

The Liberals plan to establish the Bureau of Research, Engineering and Advanced Leadership in Science (BOREALIS), linking AI development directly to the Canadian Armed Forces and the Communications Security Establishment Canada , which provides the federal government with information technology security and foreign signals intelligence.

This approach to AI is focused on what it offers to Canada's defence, whether by manufacturing semiconductors or improving intelligence gathering, so that it can rely less on the U.S. Similarly, Canadian defence tech firms will access funding to help reduce dependence on American suppliers and networks.

The Liberals are pledging sovereignty and autonomy for Canada's defence and security, all enabled by "the construction and development of AI infrastructure."

What goes unsaid is the intense power needs of data centres, and the consequences for emissions and climate action of "building the next generation of data centres" in Canada.

Climate concerns

New data centres cannot be built without also constructing more renewable energy infrastructure, and none of this addresses emissions or climate change.

If the centres crop up in big numbers as planned, Canadians could also see their electricity costs go up or become less reliable.

That's because finding space within the existing grid is not as easy as it may sound when AI data centres require over 100 megawatts (MW) of electricity demand versus five to 10 MW for a regular centre.

With the rapidly evolving market for AI-based data centres, Canadian policymakers need to provide clear guidance to utilities in terms of their current decisions on competing industrial-scale demands. As the Canadian Climate Institute points out: "Anything less risks higher rates, increased emissions, missed economic opportunities - or all of the above."

So far, the Liberal plan fails to address any of these concerns.

A Canadian department of efficiency?

What else does the "economy of tomorrow" hold?

Apparently, it means more efficient government. According to the Liberal plan, AI "is how government improves service delivery, it is how government keeps up with the speed of business, and it is how government maximizes efficiency and reduces cost."

Despite otherwise clashing with the Trump administration, this language is reminiscent of Elon Musk's Department of Government Efficiency (DOGE), which has also centred its use of AI.

The Liberals will open an Office of Digital Transformation, which aims to get rid of red tape and "reduce barriers for businesses to operate in Canada."

They don't seem to really know what this would actually look like, however. They say: "This could mean using AI to address government service backlogs and improve service delivery times, so that Canadians get better services, faster."

Their fiscal plan points out that this frame of thinking applies to every single expenditure: "We will look at every new dollar being spent through the lens of how AI and technology can improve service and reduce costs."

The economy will also benefit, the government argues, from AI commercialization, with $46 million pegged over the next four years to connect AI researchers with businesses.

This would work alongside a tax credit for small and medium-sized businesses to "leverage AI to boost their bottom lines, create jobs, and support existing employees."

But a new report by Orgvue, the organizational design and planning software platform, shows that over half of businesses that rushed to impose AI just ended up making their employees redundant without clear gains in productivity.

Creating a tax credit for smaller companies to introduce AI seems like a recipe for repeating the same mistake.

Protect Canadians with good AI policy

Much of the Liberal plan seems to involve taking risks. There's a shortsightedness on this rapidly advancing technology that requires significant guardrails.

The government seem to view AI as a solutions machine, buying into the hype around it without taking the time to understand it.

As policy is properly hashed out in the weeks and months to come, the Liberals' feet will have to be held to the fire on the issue of AI. Canadians must benefit from its limited uses and be protected from its abuses.

Jake Pitre does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.